Victoria’s Housing Crisis Worsens as Construction Hits Decade Low
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Victoria is facing a significant housing crisis, as the latest data from the Australian Bureau of Statistics (ABS) reveals that new home constructions in the state have plummeted to their lowest point in a decade. This downturn comes at a time when the Victorian Government has set an ambitious target of 80,000 new homes per year, a goal that seems increasingly out of reach with just 55,653 homes completed over the past twelve months.
Kelly Ryan, CEO of the Real Estate Institute of Victoria (REIV), expressed deep concerns about the declining housing construction numbers. “We’ve got a great opportunity to build 800,000 new residential properties in the coming decade to ease our housing crisis,” Ryan said. However, she highlighted that the recent ABS figures underscore the urgent need for innovative and progressive policy thinking to achieve these targets.
The REIV has been vocal about the need for the Victorian Government to overhaul its property taxation strategy. According to Ryan, current tax policies act as a significant deterrent to investors, which could ultimately jeopardize the state’s housing goals. “The latest ABS results highlight the importance of innovative and progressive thinking necessary to achieving this goal,” Ryan remarked.
In response to the crisis, the REIV has put forward several recommendations in its 2024-25 Budget Submission. These include reconfiguring the state’s property taxation regime to attract investors, offering tax incentives for rental providers who supply long-term rental stock, conducting a comprehensive review of stamp duty, and retaining negative gearing.
“We need policies that encourage investment to retain and grow our state’s property sector,” Ryan added, emphasizing the critical role of investment in reversing the downward trend in housing construction.
The call to action from REIV comes as a stark reminder of the challenges facing Victoria’s housing market and the broader implications for the state’s economic and social fabric. As the government considers its next steps, the focus on aligning housing objectives with taxation policies will be crucial to overcoming these hurdles and ensuring a stable housing future for Victorians.
With such challenges ahead, stakeholders and policymakers will need to engage in thoughtful deliberation and swift action to prevent further escalation of the housing crisis in Victoria.
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