What The 2023 Victorian State Budget Means For Melbourne’s Property Market

Victoria’s 2023 state budget has elicited mixed reactions. The budget papers predict dwelling prices will grow by six per cent in 2024, with Victoria’s economy and jobs market also tipped to stay strong.

Noel Jones Ringwood Director, Brett Freeman, said while the budget focused on cost-cutting, it also confirmed ongoing infrastructure investment in Melbourne’s east.

“The funding allocations for significant local construction projects will continue to have a positive impact on local amenity, lifestyle and ultimately property prices,” Freeman said.

In the same week the budget was released, two level crossings were officially removed on Union Road, Surrey Hills and Mont Albert Road, Mont Albert, with the new Union Station now open. $17 million will be contributed towards revitalising cultural hubs in Box Hill, Boronia and other key locations across Melbourne, aimed at supporting traders’ groups and creating local jobs.

“The improved infrastructure and connectivity to the CBD and beyond will drive increased demand for properties in the eastern suburbs.”

Industry advocates like the Property Council have praised the Victorian Government for setting aside $23 million to reform the planning system, in a move to help meet demand for residential and commercial land. $9 million has also been provided for ‘Plan Melbourne’ to support housing growth around existing infrastructure, as well as $3.5 million to unlock housing supply across Victoria.

Housing supply is currently a key issue for both levels of government – and so is debt – with the budget also outlining land tax changes that aim to raise an additional $1.15 billion from owners of multiple properties. Starting January 2024, property investors with landholdings worth more than $300,000 will pay an additional land tax of $975 plus 0.1% of the land value a year. Family homes are exempt.

“While this is frustrating news, investors should seek expert advice around these costs on how to best arrange their finances to maximise any benefits,” Freeman said.

While investors adjust to this change, many will also eagerly await the outcome of Victorian parliamentary enquiry into stamp duty. A similar review in NSW has resulted in some home buyers being given the option to pay an annual land tax rather than upfront stamp duty.

Our Noel Jones experts stay up to date with the latest in property and will continue to track the Victorian budget’s impact. To learn more about how we can assist you, contact Noel Jones today.

 

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