Shocking statistic proves Aussies are too scared to buy a house in one state

Victoria’s economy is now so sick that property investors are too scared to buy a home in the state, despite a surge in overseas migration.

Before stepping down as prime minister last year, Daniel Andrews imposed an annual $975 land tax on investors in a bid to repay $31.5 billion worth of debt from the Covid-19 crisis.

But for the average landlord with a $650,000 property, the average annual cost rises to $1,300.

The tax began in January 2024 under his Labor successor Jacinta Allan, but by April Queensland had overtaken Victoria as the state with the second highest level of new investor lending.

This is despite Queensland having almost 1.4 million fewer residents than Victoria and slower population growth.

Victoria is Australia’s most populous state after New South Wales, but ranks third in the level of new investor lending – a situation that last occurred in August 2009, after the worst of the global financial crisis.

By September, the gap had widened, with Queensland attracting $2.618 billion in new investor loans, compared to Victoria’s $2.313 billion, Australian Bureau of Lending Statistics data showed.

Queensland now has a 22.6 per cent share of new investor loans, compared to Victoria’s 19.9 per cent share.

Melbourne was the worst performing property market in Australia’s capital in 2024, despite a large influx of foreign migrants (photo, an auction in Melbourne)

Brett Warren, national director of buyers agency Metropole, said Queensland will undoubtedly have more investment properties than Victoria if the trend continues.

“With Queensland’s continued momentum, the state is expected to surpass Victoria very soon to become Australia’s second largest property investment market,” he said.

“A key reason for this shift is the changing tax landscape in Victoria.

‘The introduction of a flat rate levy on property investors, combined with additional taxes on land ownership, has made Victoria a less attractive market for investors.

“Many have started looking elsewhere, with Queensland becoming the new destination of choice.”

Melbourne was the worst performing property market in Australia’s capital in 2024, despite a large influx of foreign migrants.

The city’s average house price fell 2.3 per cent to $923,422 in the year to November, data from CoreLogic showed.

This came as the average house price in Brisbane rose 11 per cent to $974,396, with the Queensland capital overtaking Melbourne in May to become Australia’s second most expensive major city market after Sydney.

Before stepping down as Prime Minister last year, Daniel Andrews (who left with his successor Jacinta Allan) imposed a hefty annual land tax of $975 on investors in a bid to repay $31.5 billion in Covid debts.

Unusually, house prices have declined in Victoria, even though the state’s population growth of 2.4 per cent over the last financial year was actually stronger than Queensland’s 2.3 per cent.

Queensland is experiencing a large influx of interstate migration, while Victoria is more dependent on overseas arrivals.

“As more people move to Queensland, driven by the cheaper cost of living and lifestyle benefits, demand for housing continues to increase,” Warren said.

“The lifestyle appeal of these areas is only growing, making Queensland an even more desirable location for owners and investors alike.”

Unlike unaffordable Sydney, Melbourne is not experiencing a major exodus of locals to other states in search of cheaper housing.

On the housing front, this means the Victorian housing market remains strong in terms of buy-to-let mortgages, as investors continue to chase capital growth in Queensland.

But Brisbane has a much lower vacancy rate of 1.1 per cent, compared to Melbourne’s 2 per cent level, with SQM Research data highlighting Queensland as a more attractive place to be a landlord.

“As tax changes drive investors out of Victoria and affordable, high-yield opportunities emerge in Queensland, it is likely that the Sunshine State will continue to gain momentum in the coming years,” Warren said.

When it comes to economic activity, Victoria’s unemployment rate of 4.2 per cent is significantly higher than the national average of 3.9 per cent, which is also the unemployment level for Queensland and NSW.