Why Would Anyone Invest in Victoria?

Recent government policy in Victoria has left many property owners and investors questioning the long-term viability of holding or acquiring real estate within this state. As a licensed conveyancer practising exclusively in Victoria, we have observed with increasing concern the rapid shift in attitudes among landlords and prospective buyers alike.

We write today in full agreement with the sentiments expressed by Mr Danny Wallis and the Real Estate Institute of Victoria (REIV), as reported by RealEstate.com.au, in relation to the Victorian Government’s current approach to property ownership and taxation.

The Numbers Don’t Lie

Victoria has lost over 20,000 rental properties in recent times — a mass withdrawal by landlords responding directly to excessive and ill-conceived legislative reform. Many of these properties were sold or converted to owner-occupied residences. While this may seem like a win for home buyers, the truth is that it has left thousands of tenants scrambling for accommodation in a rental market that no longer offers adequate supply.

Land Tax Has Become Punitive

The current land tax structure is one of the most aggressive in Australia. From 1 January 2024, the threshold at which land tax applies has been dramatically lowered from $300,000 to just $50,000. This means even small-scale investors — those who may have only one investment property or a modest holiday home — are now being taxed in ways once reserved for large commercial portfolios.

It is disheartening to note that long-time landlords, who had previously supported the rental sector for decades, are now being pushed out of the market. These individuals are not multinational corporations or speculative developers; they are everyday Victorians trying to secure a modest financial future.

Overregulation is Driving Investment Interstate

With more than 130 changes to residential tenancy laws since 2019, landlords have been left overwhelmed and, in many cases, legally exposed. These continual reforms — many of which are unreasonably tenant-centric — have tipped the balance so far that landlords now carry nearly all of the risk and administrative burden of property management.

It is no wonder that investors are fleeing to other states such as Queensland and South Australia, where policies are seen as more balanced, stable and commercially viable. If Victoria hopes to recover its standing, the Government must stop viewing landlords as an endless source of revenue and start treating them as essential participants in the housing sector.

Undermining Economic Certainty

It is critical to understand that property investors are not just individuals with a passive interest — they are contributing directly to housing supply, government revenue through stamp duty, and the broader Victorian economy.

When you discourage investors, you don’t just lose their stamp duty — you also lose jobs in construction, you drive up rents due to dwindling supply, and you introduce uncertainty into a market that desperately needs stability.

A Return to Common Sense is Urgently Needed

If the Victorian Government is serious about housing affordability and market sustainability, it must urgently reconsider its approach. Land tax must be wound back to reasonable thresholds. Regulatory reform should be paused and reviewed with actual investor consultation. Investors — including those providing housing to thousands of Victorian tenants — must be brought back into the fold, not driven out of the state.

We firmly support the message conveyed by Mr Wallis and the REIV: Victoria must become a place worth investing in once again.

 
If you are a current or prospective investor, and you have concerns about how Victorian policy changes may affect your property plans, we encourage you to seek appropriate advice from an experienced conveyancer.