A leading real estate industry group believes Victoria’s Allan government has cost Melbourne homeowners $100k.
The Victorian government’s growing list of housing policy changes has been accused of costing Melbourne homeowners an average $100,000 in the past three years.
New analysis by the Property Investors Council of Australia has estimated the city’s significant underperformance compared with other state capitals from 2022 to 2025 has cost the average homeowner anywhere from $98,000 to $587,000 — potentially hundreds of billions of dollars across the state.
Headed by Melbourne-based property professional Ben Kingsley, PICA has claimed that the capital’s consistent underperformance against those of other states has been largely at the hands of state government interventions — though acknowledged the state had also had one of the best levels of supply of new units in the 15 years to 2025.
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Key problem policies include the Covid Debt Levy, particularly its reduction of the land tax threshold from $300,000 to $50,000, expansions to vacant land taxes and short-stay levies, a growing list of rental reforms especially those impacting landlord flexibility, and a rise in total property-related taxes, levies and charges.
The report also sites “critical levels” of state debt, led by cost blowouts on the North East Link and Metro Tunnel.
Even Covid-era scarring is being touted as a factor, with the impacts of work-from-home dramatically shifting normal housing market function over an extended period of time.
A flood of landlord’s selling homes in response to a number of the policies has also led to suppressed home value growth, as it created an oversupply of homes.
PICA analysis shows how much more money Melburnians would have made if they’d owned a home in other major capitals.
Starting from the Covid era, they argue successive state government decisions have compounded and reinforced multiple market factors to create Australia’s weakest property market.
As a result, from January 2022 to December 2025, PICA argue the city’s median dwelling price, which covers both houses and units, has risen just $28,000.
While interest rate hikes and a rising cost-of-living crisis would also normally impact home values, they did not hit interstate growth margins.
Sydneysiders picked up an extra $98,000, Brisbanites an additional $345,000, Adelaideans a further $405,000 and Perth residents a nation leading $587,000 bonus above Melbourne’s.
“Melburnians who own property are being short-changed by this current Labor government to the tune of hundreds of thousands of dollars, and according to the government, they think that’s fine because it’s making housing more affordable,” Mr Kingsley said.
“You have these well meaning property policies, but the unintended consequence is that you are starving those homeowners of value growth.”
PICA chair Ben Kingsley believes Victorian government policies have been the major difference between Melbourne home prices and a six-figure windfall.
While he acknowledged this had improved housing affordability, Mr Kingsley said without an adequate increase in new housing construction the true issue behind that problem was not being addressed.
He warned without more action on that front, suppressed home values could eventually face a very sharp increase that could create a highly volatile market in Victoria that would hurt owners even more.
He also noted that the lost value would ultimately come back to haunt Victorians as they looked to retire, potentially costing many the option of retiring interstate as many from past generations had done.
“There goes the caravan, the new 4WD or the international holiday — and that’s hitting the prosperity of the city,” Mr Kingsley said.
“There’s no winners when government regulation gets so restrictive that it holds back demand for property sales and hurts rental supply.”
A raft of Allan government housing policies and tax tweaks have been blamed for Melbourne’s under performance as a property market. Picture: NewsWire / Josie Hayden.
A Victorian government spokesperson said they made “no apologies for our housing reforms” arguing they had delivered more new homes than any other state, and made Victoria “the best state in Australia for first-home buyers”.
“We’ve introduced more than 150 nation-leading reforms to make renting fairer and safer, including banning no fault evictions, stamping out rental bidding, and extending notice periods for evictions and rent increases from 60 to 90 days,” the spokesperson said.
The government has also touted the state’s nation-leading rental affordability, and argued it was the top spot for new home building in the country.
Australian Bureau of Statistics data shows in 2025 Victoria built 54,156 new homes — while higher than any other state, it was still more than 25,000 homes short of the Allan government’s 80,000 homes a year target.
In some parts of the city, and contrasted with certain other major capitals, Melbourne’s housing hit could be worse than $100,000.
Mr Kingsley said government claims they were improving affordability were like saying “they are happy to burn the village to save the village”.
PICA has called on the state government to review policy settings with a view to renewing confidence in the state and encouraging investment.
It follows calls from the Real Estate Institute of Victoria for the government to review a number of its policies and taxes, particularly stamp duty, after an independent survey revealed the majority of Victorians believe taxes and regulation are impacting both homebuyers and property investors.
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