Victorian Premier Jacinta Allan and Treasurer Jaclyn Symes (left) ahead of today’s state budget. Picture: NewsWire/ David Crosling.
An “anaemic” budget has done little to support Victorian homebuyers and owners, despite the state government forecasting rising prices in the coming financial year.
Property industry experts have indicated the Reserve Banks expected interest rate cut will do more to support people planning to buy a home or struggling to pay a mortgage.
Key announcements included a $61m top up to a stamp duty concession scheme that lets those buying yet-to-be built apartments and units pay the tax on just the land component of their future home, with all homebuyers pursuing such homes now able to claim the discount until October 2026.
RELATED: Allan government extends massive stamp duty savings
Victorian Homebuyer Fund: Government shared equity scheme to end by June 30th 2025
Victorian state budget: Homebuyer Fund to get $700m shot in the arm, before being dumped
It is understood the scheme is expected to support 5000 Victorians across its full term, with those who have already made applications averaging a $25,000 property tax saving on their purchases to date.
Budget papers cited examples where a person buying a $620,000 apartment who would have otherwise paid $32,000 would instead pay $4000, however there is a sliding scale on savings based on how much construction has been done on a development at the time of signing to purchase it – with lower reductions for those who wait for more of the building to be completed.
It is understood that reductions will be applied upon settlement of the purchases, meaning exact numbers will be difficult to predict.
Apartments and units that are part of a strata plan are the only homes eligible for the stamp duty saving being extended in this budget. Picture: Asanka Ratnayake/Getty Images.
This has been paired with a $24m investment to support the state’s Tram and Train Zone activity centres, which is intended to help private developers create 300,000 new homes around key infrastructure locations across Melbourne.
While not covered by the off-the-plan concession scheme, the budget also included $12m to top up the pipeline of housing estate land to the city’s outer west, north and south east, expected to support the private development of 180,000 new houses.
Homeowners looking to make their home more sustainable are also set to benefit from $27.9m to support rebates for 27,000 Victorians to swap out their gas hot water system for more energy efficient alternatives, plus $12m to discount ceiling insulation installations.
In a tacit acknowledgment of the state’s housing affordability crisis and ongoing home loan pain faced by Victorians, the state government will also add $4m to Mortgage Stress Victoria to help fund support including legal advice, financial counselling and social work.
Minister for Housing Harriet Shing said the government were “determined to help more Victorians to find a home they can be proud to call their own”.
Planning minister Sonya Kilkenny said the budget was paving the way for more homes to be built in Victoria. Picture: Valeriu Campan.
Planning Minister Sonya Kilkenny said the government’s goal was to build more homes in inner suburbs that are close to trains and trams, as well as more homes with backyards in the outer suburbs.
Minister for Energy and Resources Lily D’Ambrosio said they were looking to provide long-term support for home energy bills via support payments for heat pump and insulation installations.
However, real estate and construction industry bosses have labelled the budget anaemic and indicated a rate cut by the reserve bank would do more to assist homeowners and homebuyers.
Prominent buyer’s advocate Cate Bakos said an interest-rate cut “would be much more significant than our state government’s budget”.
“I thought it was pretty anaemic for housing, to be honest,” Ms Bakos said.
The buyer’s advocate said her read of the budget was that the state government felt Victoria’s rental crisis had been slowed by a series of rental reforms they have announced, but warned this was a shortsighted view.
Prominent buyer’s agent Cate Bakos has described this year’s budget as “anaemic” for homebuyers and homeowners.
In reality, Ms Bakos said this was more likely being caused by tenant households increasing in size with more people living under one roof, effectively limiting the number of people seeking homes and slowing rent growth.
However, with Australian Housing and Urban Research Institute data indicating the nation needed 1.1 million more social homes to be built by 2037, she said they “still needed something in this budget” for renters and social housing.
“They have a lot of playing catch up to do getting on top of this,” Ms Bakos said.
“So this is a missed opportunity.”
Ms Bakos said while no further announcements around taxes or reforms for investment property owners would be welcome after significant changes in recent years, “I don’t think they could go any harder on them”.
She said the only real positive would have been repealing land tax changes brought in at the start of 2024 that were announced in the 2023 budget.
The arrival of the increased land tax costs has coincided with a more than 20,000 reduction in rental bonds active in Victoria.
Landlord Jian Cheng has sold Victorian investment properties in response to huge land tax bills. Picture: Mark Stewart.
“They have gone way too hard in that space, in my view,” Ms Bakos said.
“Right now, we need investors and they have done everything they can to turn them the other way.”
Housing Industry Association Victorian executive director Keith Ryan described it as “another disappointing budget” that had not addressed key issues with shortfalls in trades needed for a housing construction boom.
“We weren’t expecting the government budget to do much to help the home building industry,” Ms Ryan said.
While he noted that the extension to the off-the-plan stamp duty concessions was “not a bad thing”, it wasn’t likely to make a large difference.
“I was expecting another disappointing budget, and last year was relatively light on, too,” Mr Ryan said.
He added that the bigger issue was finding the trades to build the homes, and while the previous budget had given them hope they had understood the impact the state’s big build was having on home building — he was now less convinced.
Despite an extension to a program supporting off-the-plan apartment and unit complexes, building industry figures say the bigger issue will be limited workforce. Picture: David Geraghty.
“The only thing we got last year was an assertion that they understood the importance of the big build and not having too much money spent on that, and I’m not sure how that has worked out,” Mr Ryan said.
“You can have more demand, but you also need the equation of supply, and we have a lot of concerns about meeting that demand.
“The only thing to celebrate today is the Reserve Bank’s decision.”
Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.
MORE: Rate cuts: how much Vic homebuyer budgets will rise
Help to Buy boost prompts call for Victoria to lift stamp duty cap for first-home buyers
Melbourne property market divided: Suburbs where sellers win big and buyers bargain hard
English (US) · 