Property investors, like any other group, are sensitive to the policies and sentiments of the regions they invest in. Recent research by Henderson Advocacy has highlighted an interesting trend – Victoria is becoming a "no-go zone" for some property investors. The reasons for this shift are varied, and they raise important questions about the relationship between government policies and investor behavior. Let's delve into this trend and its implications for property investment in Victoria.

Investment Hotspots: Outside Victoria

Henderson Advocacy's research identified Bonbeach, Aspendale, and Cheltenham as some of the top 50 suburbs in the nation for property investors looking to purchase a unit. These areas present opportunities that investors find appealing. However, it's striking that no suburbs in Victoria made the list for the top 50 suburbs for house investors. This finding signals a growing apprehension among investors in the state.

Victoria's Challenges: Tax Changes and Levies

Jack Henderson, the founder of Henderson Advocacy, points to two main challenges that Victoria faces concerning property investment. First, there have been changes to land taxes in the state. These alterations could impact the profitability of property investments and have led investors to seek opportunities elsewhere. Second, the introduction of a 7.5% levy on short-stay rentals like Airbnbs has further deterred investors.

Henderson notes, "From all of the clients that we work with, very few of them have an appetite for Victoria when there are such strong markets outside of Victoria." This sentiment echoes the broader concern among investors about the direction of property-related policies in the state. It's clear that investors are looking for regions with more investor-friendly policies.

The Hope for an Optimistic Outlook

Despite the current sentiment, Henderson expresses hope that the new premier of Victoria might bring a more optimistic outlook towards property investors and look for alternative ways to generate revenue without taxing property owners further. This optimism hinges on the belief that a more accommodating approach to investors could rekindle interest in Victoria's real estate market.

The Long-Term Potential of Melbourne and Sydney

Interestingly, Henderson also highlights that, without considering affordability, Melbourne and Sydney remain attractive long-term investment options. These global cities are expected to continue growing, and the scarcity of land in these densely populated areas makes them appealing for investors looking for long-term capital growth.

Suburbs Worth Considering in Victoria

While Victoria faces challenges, there are still suburbs that offer investment potential. Henderson Advocacy identified Mordialloc for units, Tecoma for houses, Lilydale for units, and Patterson Lakes for units as promising options for property investors within the state.

Industry Concerns and Rental Market Impact

The concerns expressed by Henderson Advocacy align with warnings from real estate industry groups. They believe that the state's approach to taxing and regulating landlords might reduce property ownership in a market already grappling with a rental crisis. The Real Estate Institute of Victoria's CEO, Quentin Kilian, states that such taxation and regulations erode confidence among property investors, resulting in an exodus of rental providers.

Conclusion

The evolving landscape of property investment in Victoria offers a nuanced perspective. While some investors are shying away due to recent policy changes, others still see the long-term potential in Australia's bustling cities. Victoria's challenge lies in balancing the needs of renters, the property market, and investors. The government's approach to property policies will play a significant role in shaping the state's property investment landscape in the years to come.

‍