Lack of incentives and rising charges frustrate property sector
The 2025 Victorian budget has drawn sharp criticism from the state’s property sector, with industry leaders arguing it offers little to address housing supply issues or alleviate rising development costs.
Despite missing its housing targets by over 20,000 homes, the Victorian government has not introduced substantial new initiatives to boost housing construction or address the financial pressures developers face.
Industry representatives say the absence of a clear strategy to reform development taxes is a missed opportunity, particularly with government-imposed costs contributing as much as 43% to the price of a new home.
While a recent expansion of stamp duty exemptions for off-the-plan properties was welcomed by stakeholders, it is viewed as insufficient to drive the broader growth the sector needs.
Cath Evans (pictured above), Victorian executive director of the Property Council, expressed concern about the government’s lack of action. “The industry was hoping for progress – instead, we’ve hit a stop sign,” she said.
Evans noted that the council had been calling for measures to ease the tax burden, support first-home buyers, and make projects more viable. She said none of these priorities were addressed.
“Taxes have the industry in a chokehold, with a myriad of government fees, costs and charges that have continually increased and stifled investment,” Evans said. “The industry urgently needs to see the development of a roadmap to improve project viability moving forward.”
Earlier this year, NAB’s then chief economist Alan Oster offered a bleak view of the state’s housing outlook. He remarked that Victoria “is not doing well,” citing low business confidence, high unemployment, and declining property values. He also highlighted the effect of land taxes on investment decisions, noting that property investors are increasingly looking to other states with less punitive regimes.
Foreign investment in Victoria has similarly been impacted. According to Property Council data, increased levies on overseas buyers have contributed to the loss of 81,000 homes, nearly $93 billion in economic activity, and close to 90,000 local jobs.
“We are committed to working closely with the Victorian government to ensure that property is a focus of the state’s economic development,” Evans said. “But time is running out to deliver the solutions the industry needs.”
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