Victoria’s Property Investment Dilemma Amidst Australia’s Soaring Housing Market - Property Inc

Victoria’s Property Investment Dilemma Amidst Australia’s Soaring Housing Market

Amidst the tumultuous real estate landscape in Australia, recent findings shed light on the disparities across states, with Victoria being labeled the least attractive state for property investors, while the national housing market value astonishingly hits $10 trillion once again.

A report by Nathan Mawby reveals that one in four Melbourne property investors sold at least one rental home over the past year. The annual Property Investment Professionals of Australia (PIPA) survey indicates that the city’s reputation has significantly plummeted, dropping from the nation’s second-favorite to the penultimate choice for landlords. This sharp decline in investor interest is alarming, with PIPA’s chair Nicola McDougall expressing concerns about the “scary” levels of investors contemplating selling in the upcoming year.

In her words, “A lot of investors have been selling … and it would be lovely to see more of them back into the market,” but she remains skeptical about their return due to current conditions in the country. The overarching sentiment is echoed by Ben Kingsley, Property Investors Council of Australia director, who believes that the Victorian government needs to take note as investors increasingly feel that the “juice isn’t worth the squeeze”.

On the flip side, Hanan Dervisevic’s article provides a contrasting perspective, highlighting that Australia’s housing market has rebounded to a valuation of $10 trillion. This surge, attributed to an unexpected price recovery since March and an increase in the number of homes to 11 million, marks the first time national home values have reached double figures since early last year2. CoreLogic Head of Research, Eliza Owen, attributes this growth to factors like net overseas migration and constrained supply.

Quoting Owen, “Demand for housing is being pushed higher by a combination of returning overseas arrivals, and a drop-off in overseas departures,” which combined with a “persistently low average number of people per dwelling” is heightening the competitiveness for properties on the market.

However, while the national housing market seems to be on an upward trajectory, uncertainties loom. The recent data suggests residential real estate as the primary wealth source for Australians, surpassing superannuation and listed stocks.

In conclusion, while Australia’s housing market showcases resilience, regional disparities are evident. Victoria’s dwindling appeal to property investors poses concerns for its future rental supply and real estate dynamics. It remains to be seen how these divergent trends will play out in the longer term.

References:

Mawby, N. (2023). Victoria ranked worst state to be a property investor as one in four Melbourne landlords sell home in past year. ↩ https://www.realestate.com.au/news/victoria-ranked-worst-state-to-be-a-property-investor-as-one-in-four-melbourne-landlords-sell-home-in-past-year/  

Dervisevic, H. (2023). Australian housing market tops $10 trillion for the second time. ↩ https://www.savings.com.au/news/corelogic-housing-market-ten-trillion 

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