With a significant number of property investors reportedly leaving Victoria due to new tax policies and rental reforms, Adviseable property buyer Kate Hill (pictured above) sees a unique investment opportunity.
“Now is the time to invest in Victoria because of much lower competition from other investors,” Hill said.
Despite the negative press around the land tax changes and rental reforms, Victoria’s fundamentals remain strong.
“The key is to recognise that Victoria continues to be a sound property investment location with solid prospects for cash flow and capital growth over the years ahead,” Hill said.
She urged investors to look past immediate challenges and consider the long-term benefits of investing in a state that houses nearly 7 million people.
The current market conditions in Victoria, characterised by subdued property prices and a low vacancy rate in Melbourne of just 1% suggested potential for higher rental yields.
“The exodus of investors from the state is likely to result in a prolonged rental catastrophe that will push rents higher, which is a terrible situation for renters,” Hill said, indicating that these circumstances could benefit investors ready to enter the market.
While many investors are flocking to Perth, Hill cautioned against following the crowd.
“Perth is over-cooked with many investors overpaying for inferior dwellings, because seemingly the Western Australian capital is still the ‘new property black,’” she said.
Instead, the Adviseable property buyer recommended that investors consider the opportunities in Victoria, where the potential for returns is enhanced by current market conditions.
Hill acknowledged the impact of Victoria’s land tax on investor sentiment but argued that the backlash might be overblown.
“Even though the Victorian land tax is a hideous and outrageous cash grab, it’s important that people stop demonising Victoria,” she said.
Hill pointed out that rental reforms have been implemented in other states without as much controversy, suggesting that the response in Victoria might be disproportionately negative.
“At the end of the day, minimum standards for properties do still cost investors money – they can’t get around that regardless of what state they invest in,” she said.
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