While Victoria is expected to witness price increases in the coming months, the level of residential supply appears to be an issue, according to the latest ANZ / Property Council poll.
Despite constant and positive confidence in the Victoria housing market, the study found that the low level of state housing supply remains a concern, given its likely impact on affordability and prices.
The state government's decision to reduce property tax revenue from $ 3.6 billion to $ 3.5 billion could further restrict the supply of new housing, said Cressida. Wall, Executive Director of Victoria at the Property Council of Australia.
"The return of buyers to the market and the improvement in house prices, without new supply, means that house prices will continue to increase and further compromise accessibility", a- she declared.
According to a report released last year by the Urban Development Institute of Australia (UDIA), Victoria is heading for a housing supply deficit.
Read also: It's time to take a look at the Victoria region
Approvals for new housing decreased to 59,719 in the 12 months to June 2019, down from 75,613 from the previous year. UDIA said it could decrease the number of homes completed from 58,978 to 48,581. According to UDIA estimates, this would result in a deficit of 6,846 units between the Supply and demand, a huge difference from the previous year's 4,565 surplus.
The suburbs near Melbourne CBD would likely feel the impact of the shortage. Apartment approvals in the central city district, which consists of central Melbourne, Maribyrnong, Yarra, Stonnington and Port Phillip, have decreased by more than 50% from 12,074 to 5,078. also fell from 900 to 524.
Melbourne recorded the largest drop among the board areas, with approvals dropping from 7,350 to 1,924.
However, a possible shortage of supply is not the only challenge facing the state. The ANZ / Property Council survey also found that trust in the state government has turned into negative territory for the first time in 12 months. Expectations of strong economic growth have also eased.
"If we are to seriously address affordability in Victoria, the government must support the industry in providing the supply required by the market. This requires speeding up the process of making land available and supporting the delivery of denser housing projects, especially construction for rent, "Mur said.
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