Residential capital growth expectations within Victoria have increased by 25 index points for the March 2020 quarter according to the ANZ/Property Council Survey released today.
The anticipated uplift in house prices poses a challenge for housing affordability with last year’s new residential supply figures delivering significantly less supply than required to meet Victoria’s growing population.
Adding concern to future supply pipelines was the decision by the State Government in the mid-year budget to write down land tax revenue from $3.6 billion to $3.5 billion.
According to Cressida Wall, rising residential capital growth expectations combined with the Government’s decision to downgrade the land tax revenue estimate point to constrained new housing supply.
“The return of buyers to the market and improving house prices, without new supply, means house prices will continue to rise and compromise affordability further.”
Constrained supply isn’t only posing a challenge to house prices, confidence in the State Government has also fallen into the negative for the first time in 12 months. Expectations around state economic growth have also flatlined.
“We urge the government, to take the survey results as a call to action,” said Ms Wall.
“If we are to seriously address affordability in Victoria, government needs to support industry in delivering supply required by the market. This requires accelerating the land release process and supporting the delivery of denser housing projects, especially Build to Rent”.