NAB’s economic update reveals rents have increased 11% over the last year.
Meanwhile, property investments are down 5.1%. Landlords are selling up in Victoria and investing elsewhere.
To compound matters further, approvals for new housing continue to decline.
With 161,758 net migration in Victoria in 2023, our population is growing and availability of housing is declining.
Normally, the forces of supply & demand are skewed towards one side. Presently, both sides are working against each other. The see-saw is broken.
Let’s assume these 161,758 migrants reside in households with 2.5 people (average household size); this means an extra 64,703 dwellings were required in 2023. Victoria approved 51,045 new dwellings in 2023, and completed 56,300 dwellings.
Government policies play an important role in this broken situation. Federal government has lost control of our migration intake. At the same time State government is trying to restore it’s budget. There is a war against property investors, with a goal to extract $4.7bn over the next four years through land taxes and levies.
To achieve housing affordability improvement, we need to restore the supply and demand balance. This will require changes on both sides of the see-saw.
