The Advocates specialises and is experienced in property sourcing inclusive of residential and commercial property for occupancy or Investment throughout Geelong, the Bellarine Peninsula, the Surf Coast and Melbourne. We also offer clients the services of auction bidding, negotiation and vendor consultancy.
The time is closing in on Melbourne becoming the cheapest capital city in Australia in which to purchase a home. Now that Adelaide has trumped Perth for median price supremacy the western most capital is the only hurdle that remains. Although good news for property buyers with a budget below $5m – overall it is not an occasion to rejoice. It is a bleak reality that the Garden State has reached the status of the worst performing Australian state since the peak of 2022 where prices have decreased more than any other over the last 12 months and where, ironically, residents now pay the highest property taxes than any other state or territory and arguably, second only to Belgium – in the world. Melbourne has also claimed third prize behind Darwin and Hobart for the lowest capital appreciation over the past 10 years. Our state debt per capita is also amongst the highest on the planet. Migration numbers are still too high but is being adjusted this year and crime should also not be overlooked as an influence to investors when deciding where to buy.
Melbourne finished down for the final quarter of 2024 and 3% off the pace for the year. Regional areas fared only reasonable better with a decrease of 2.8% over the 12-month period. Back to the good news. It may well be one of the best times to buy a home throughout many pockets of Melbourne and many regional towns. Portarlington as an example was recently voted second most attractive town in which to buy – given criteria of affordability, tidiness, location, nearby tourist attractions and proximity to the CBD (via boat, rail or car).
Although the reduction in migration will be a welcomed by home buyers there will continue to be an oversupply of property due to forced sales and the constant irritation of taxes taking its toll. Rental availability will remain low at 1% for a time and will need to increase to a more equitable figure of closer to 5% so that all would- be tenants can secure a suitable home. I do wonder sometimes if some people are in crisis given the attendance at concerts and sporting events and the likes of queues for new phones and the appetite for smart watches. I fully accept that some individuals and families need financial assistance for everyday items and paying bills and it is these groups we need to urgently assist.
I am predicting that real state will pick up from its current dormant situation in the latter part of 2025 and I believe the Reserve Bank will pass on interest rate relief to the tune of 25 basis points in March if not next month. My first prediction in 2 years of a downward movement. This decision will be made more for the sanity of mortgage holders and the current pressure of the cost of living rather than inflation being satisfactorily tamed. Unfortunately I don’t see this generosity from the bank as a regular occurrence throughout 2025.
Michael Ramsay
Principal
The Advocates
Taxes
It is fair to say that keeping on top of property taxes in Victoria is verging on a full time occupation. We will be burdened with the COVID debt repayment plan for yet another 9 years which includes the exorbitant land taxes. This is arguably due mainly to the past incompetence of the treasury department of the state. I rather doubt that the taxes will cease in 2033.
As best as I can surmise the following are a summary of the taxes and levies we pay for the privilege of buying a property in this state, all of which attract Transfer Duty. As this particular tax (known more commonly as Stamp Duty) is not enough to balance the books, additional taxes and levies have been introduced.
Transfer Duty (Stamp Duty)
Land Tax (increased)
Land tax surcharge of 1.2% if held by a trust
Absentee Owner Surcharge (non-Australian Citizen or non-permanent resident)
Vacant Residential Land Tax
Windfall Gains Tax – up to 62.5% if rezoning increases value between $100,000 and $499,000.
Growth Areas Infrastructure Contribution
Metropolitan Planning Levy
Short Stay Accommodation tax of 7.5% (on GST and cleaning also) The total amount of tax collected last year through property transactions was $31.4 billion. Surely now it is the governments turn to rein in spending and stop implementing new taxes to pay down the states debt.
Victorian Statistics
| MEDIAN HOUSE PRICE MELBOURNE | $895,000 |
| MEDIAN UNIT PRICE MELBOURNE | $590,000 |
| MEDIAN PRICE REGIONAL VICTORIA | $590,000 |
| MEDIAN UNIT PRICE REGIONAL VICTORIA | $400,000 |
| AUCTION CLEARANCE RATE | 65% |
| CASH RATE | 4.35% |
| INFLATION RATE | 3.2% |
| RENTAL VACANCY RATE | 1.64% |
From the team at The Advocates
Tip
It is great to have extra ventilation in summer but not so good during the colder months. Start preparing now to seal your doors and windows. You will be amazed at how much warmer your house will be on cooler days. The savings on you power bills can also be considerable.It is great to have extra ventilation in summer but not so good during the colder months. Start preparing now to seal your doors and windows. You will be amazed at how much warmer your house will be on cooler days. The savings on you power bills can also be considerable.
P.S.
We welcome input to our newsletters so please contact us with any experiences you’d like to share – positive or otherwise! Disclaimer: the information contained in this newsletter is based on personal opinion and experience, it should not be considered professional financial investment advice. Statistics are sourced from the REIV and RP Data