Hotspotting

As Victoria’s housing market continues to grapple with rising rents and dwindling rental stock, the Real Estate Institute of Victoria (REIV) has issued a timely and urgent plea: reduce the tax burden on rental providers and stop penalising those who are keeping the rental market afloat. 

But instead of heeding the call, the Allan Labor Government is doing the opposite—hitting landlords, small business owners and short-stay providers with wave after wave of new or higher levies in a desperate bid to plug a $188 billion black hole in the State Budget.

This week, the REIV released a submission ahead of the 2025–26 Victorian Budget urging major property tax reform. 

Their request is simple but critical: reduce stamp duty and land tax for rental providers, create incentives for long-term leases, and rein in red tape that’s pushing investors out of the market. 

Their data shows the consequences of government inaction are already being felt. Between March and September 2024, Victoria lost 24,000 rental bonds. That’s not a minor fluctuation—that’s a mass investor exodus. And it’s tenants who are victims.

REIV CEO Kelly Ryan summed it up perfectly: “At the heart of our submission is the need to ensure a more balanced tax and regulatory regime that includes adequate incentives for rental providers.” 

Ryan also called for alignment with international rental markets by supporting longer-term leases, which would benefit both renters and investors with added security and certainty.

But while the REIV is offering sensible, balanced reform ideas, the Victorian government is proving once again that it’s more interested in cash grabs than meaningful solutions. 

Since 2023, we’ve seen an aggressive ratcheting up of land taxes, the introduction of new taxes, an ongoing expansion of compliance obligations, and now—another levy, this time under the guise of funding emergency services.

From July, landlords will be hit with a higher version of the new Emergency Services and Volunteers Fund levy—effectively replacing the old Fire Services Levy but applying higher rates to landlords than to owner-occupiers. 

This comes on top of the 7.5 per cent short-stay accommodation tax that began in January and a land tax regime that’s already the most punitive in the country.

The state’s land tax threshold was quietly dropped from $300,000 to $50,000, dragging hundreds of thousands of everyday Victorians—including Airbnb hosts, home-based businesses and retirees—into the tax net for the first time. 

These aren’t major corporations. These are teachers renting a room on Airbnb, retirees running consulting businesses from a home study, and families listing a property while working overseas.

According to tax experts at Mills Oakley, even earning just $30,000 from a garage-based side business can now trigger a tax bill that previously didn’t exist. The State Revenue Office is retrospectively combing through tax records, hitting unsuspecting homeowners with bills going back five years. 

This is not reform—it’s a cash grab. And its brutal for ordinary people who are trying to find ways to pay their bills.

And what’s the government’s response? Treasurer Jaclyn Symes—who insiders say had to be asked to avoid using “economic terms” in briefings because she “doesn’t understand them”—has arrogantly stated that landlords “can afford to pay more.” 

That’s the level of economic sophistication we’re working with.

Look up the term “out of touch” and you’ll see a photo of Jaclyn Symes.

The real-world consequences are clear. Property investors are selling up, thereby reducing rental stock, and those who remain are compelled to pass on these increased costs to tenants. 

As rental supply falls, prices climb. Some renters are now facing $200-a-week increases, according to Suburb Advice. And yet the Victorian Treasurer remains oblivious, insisting it’s fair and necessary.

Meanwhile, short-stay hosts and home-based business owners are also feeling the squeeze. 

Luke Achterstraat from the Council of Small Business Organisations said:

“This cynical ‘bottom of the barrel’ approach to revenue raising will only punish mum and dads seeking to innovate and provide their families a living.”

It’s no surprise that Victoria has recorded a 12.8 per cent decline in rental stock over the last decade. Investor confidence has been shattered by a decade of anti-landlord policies, with no sign of relief on the horizon. What we’re seeing now isn’t just short-term economic mismanagement—it’s a structural dismantling of the private rental market.

The Allan Government talks a big game about affordability, supply and fairness, but their actions tell a very different story. 

Every new tax, every additional compliance cost, and every ideological jab at rental providers pushes Victoria further from the housing targets outlined in its own Housing Statement.

Australia’s population grew by 1.8 per cent in the 12 months to September 2024, adding 484,000 people to the national headcount, according to the latest figures from the Australian Bureau of Statistics (ABS). 

That puts our population at 27.3 million, with overseas migration once again leading the charge—albeit at a slower pace than earlier quarters.

While the post-pandemic migration surge has moderated, we’re still seeing 618,000 arrivals versus 238,000 departures, giving us a net overseas migration figure of 380,000. 

This continues a tapering trend, but still marks a major contributor to the housing pressure being felt across the country.

Western Australia led the states in population growth, rising 2.5 per cent. Victoria followed at 2.1 per cent and Queensland at 2.0 per cent. In contrast, Tasmania’s population barely grew, increasing just 0.3 per cent over the same period.

At the state level, New South Wales added 120,800 residents to reach 8.5 million, while Victoria added 146,700 to reach just over 7 million. Queensland’s population climbed to 5.6 million, with 111,900 new residents over the year. 

These increases represent real housing demand across all tenures: ownership, rental, and emergency accommodation.

But while net overseas migration is slowing, a separate but related shift is gaining traction again: regional migration. 

The Regional Australia Institute’s (RAI) latest Regional Movers Index revealed that internal migration to regional areas, while slowing compared to the COVID boom, remains a long-term structural trend.

The RMI shows a fourfold increase in migration from capital cities to places like Bendigo and Bunbury. 

Sydneysiders still account for the bulk of outflows (59 per cent), although that share is falling. Melburnians, on the other hand, are rising—now making up 40 per cent of net capital outflows.

Greater Geelong and Bendigo are the clear winners in Victoria. Bendigo, in particular, is surging off the charts, with a 63 per cent quarterly growth in migration and a fourfold increase year-on-year. 

It’s now second only to Bunbury in WA as the fastest-growing regional centre.

And what happens when people move? House prices follow.

Bunbury’s median house price jumped 28 per cent in 2024—the highest growth of any WA regional centre. Geelong’s rise in popularity is also pressuring housing stock and values.

What this all signals is that the city-to-regional migration story isn’t going away—it’s simply evolving.

And it’s not just young professionals making the shift. According to new research from the Australian Housing and Urban Research Institute, older, wealthier Australians are leading the regional migration trend, motivated by lifestyle factors and affordability. 

This shift has profound implications—not just for property values but for rental stress in areas traditionally considered affordable.

Professor Nicole Gurran from the University of Sydney notes that regional migration creates a “ripple effect”—pushing up rents and home prices not only in high-growth towns but also in outlying areas as low-income earners are displaced.

“Increased pressure on housing costs in the regions creates knock-on effects for affordability in neighbouring communities,” Gurran said. “It’s especially critical that we ramp up investment in social and emergency housing to offset these shifts.”

So what’s the bottom line?

Australia’s housing supply continues to lag population growth. Migration—both international and domestic—remains a powerful driver of housing demand. And while big-city markets get the media spotlight, regional areas are where the most intense growth and pressure are now playing out.

Investors, policymakers, and developers should be taking note: this isn’t a COVID blip—it’s a decade-long demographic realignment. Ignore it at your peril.

Australians who sell residential properties are achieving record profits, according to the latest Pain & Gain Report from CoreLogic.

The median profit achieved by Australian vendors was $306,000 in the December quarter of 2024.

That’s the highest nominal gain recorded since the data-set began in the mid-1990s. 

But behind the headline figure lies a more nuanced story—one where detached houses continue to deliver, while units in Sydney and Melbourne are still unwinding the damage of past planning mistakes.

The report analysed 95,300 resales nationally over the quarter, with 95% of sellers booking a profit.

For those 5% of re-sales that didn’t make a profit, the median loss for unprofitable sales rising to $45,000, up from $40,000 in the prior quarter and above the five-year average.

Still, the nominal gains from resale reached a whopping $35.6 billion in the December quarter— a little higher than the quarter before.

As always, the devil is in the detail. Brisbane led the capitals with an astonishing 99.6% of resales achieving a profit. But Melbourne and Darwin lagged, with just 89.2% and 71.7% of sellers turning a gain, respectively.

And the biggest culprit? Units in Sydney and Melbourne. These two cities alone accounted for 60% of all loss-making resales nationally, despite representing only 34% of total sales.

Interestingly, over a third of loss-making sales in Q4 had hold periods of four years or less. One in four were sold within two to four years of purchase. “Short selling times can increase the risk of making a loss,” CoreLogic said—particularly if you’ve bought at the peak of a cycle and been forced to sell before values rebound.

Yes, profits are strong on paper, but not everyone’s winning. Unit investors in oversupplied markets — especially those who bought off-the-plan in the past —are still paying the price for speculative decisions made a decade ago. 

And as always, property rewards the patient. Short hold periods, volatile lending policy, and poor asset selection will often be punished by the market.

New research has confirmed one of the greatest scandals in Australian real estate – the reality that taxes and charges from the three levels of governments comprise between 40% and 50% of the cost of creating new homes.

At a time when Australia is experiencing its greatest ever housing crisis - marked by shortages of homes, poor affordability, escalating rents and increasingly high construction costs - it’s outrageous that anyone building a new house on a small block of land will be paying a huge percentage of the cost to government.

Taxes, fees and charges make up almost 50% of the cost of a house-and-land package in Sydney. In Brisbane and Melbourne, it’s between 40% and 45%.

Recently published data from the ABS and the HIA show that the median price for a residential home site in our capital cities is now over $400,000 – but over $700,000 in Sydney.

The average cost of building a basic house on that very small but expensive block of land is around $540,000, according to the official figures.

Add those figures together. It means that the typical cost of a new house and land package in our cities is now around $950,000. It’s getting scarily close to a million dollars.

In Sydney it’s already well over a million dollars.

And if you’re building that new house-and-land package in Sydney it’s costing around $1.2 million and up to half of that is taxes, fees and charges from government.

If you’re building a new home in Melbourne or Brisbane, you’re spending well over $900,000 and over $400,000 is going into government coffers.

Think about that. If you eliminated the government impost component of a new house and land package, it would cost around $600,000 in our biggest city. Imagine being able to buy a brand new house in Sydney for $600,000. 

In Brisbane it could be less than $500,000. 

Remember those figures, next time you see politicians standing in front of television cameras claiming they care about the affordability problems and want to fix the housing crisis.

Politicians have caused this crisis in myriad different ways and this is one of the biggest of all: they milk the housing industry for revenue and in doing so, they massively inflate the cost of creating new homes in this country.

All three levels of government use housing as a cash cow and they’re adding massively to the cost of new homes – to the point that young buyers can no longer afford to build their dream home.

One of the many ways media misinforms Australian consumers is their misunderstanding of the difference between building approvals and actual construction of new dwellings.

Right now, at a time when we have major dwelling shortages and construction costs are so incredibly high, there is a very important distinction between the number of dwelling approvals and the number of homes actually being built.

The difference between the two is quite stark and it speaks to the biggest single problem amid the housing crisis – approvals often are not translating into actual construction of homes, because building costs are prohibitive and projects are simply not viable.

The latest official figures portrayed a significant rise in the number of new housing approvals – and many in news media completely misrepresented what that meant.

One headline by News Corp, the nation’s biggest median organisation, shouted:

Total housing construction reaches record high on new apartments

The article began with: “The total value of new homes being built or homeowners making alternations hit a record high in January.”

And that was all highly misleading.

The ABS data, in fact, said there was a rise in approvals for new dwellings and for alterations and additions. ABS head of construction statistics Daniel Rossi said the total number of dwellings approved in January rose 6.3% to 16,579, following a 1.7% increase in December.

Rossi said: that approvals for units and townhouses drove the overall rise, up 12.7%, to the highest level since December 2022.

The journalist who wrote that inaccurate headline and introduction should have known better because the article quoted a senior AMP economist pointing out that there remained a big gap between building approvals and completions, and between the number of new homes and the annual target of 240,000.

The Australian Financial Review made the same mistake with its headline:

The development tide has turned on apartments

AFR said: “Australia’s apartment slump has passed the worst, after new figures showed approvals of new apartments, townhouses and semidetached homes turning positive on a yearly basis for the first time in almost 2 ½ years.

The AFR quoted several economists at length, declaring that the worst was over and it augured well for the future in addressing the housing shortage.

You have to wonder whether economists speak to anyone in the real world or just look at numbers on their computer screens.

The reality is that approvals are almost meaningless – many approved developments are not proceeding because they are not financially viable.

And that is because the costs of building are so high and buyers cannot or will not pay the price developers would have to charge for the end product.

As HIA economist Maurcie Tapang said: “Despite modest improvements in housing approvals, Australia continues to face a significant shortfall in housing supply.”

HIA is calling on the Federal Government in the lead-up to the Federal Election to help remove the barriers to new housing supply.

And that includes the factors articulated in the recent report from the Productivity Commission, which noted that it’s taking twice as long to produce new homes compared to 30 years ago.

The commission said poor productivity was largely caused by bureaucratic red tape, cost impositions by government and high levels of taxation – which had rendered many approved projects too expensive to build.

When Cyclone Alfred was bearing down on southern Queensland and northern New South Wales, the impact on the property market was probably not high on the list of considerations for citizens of these areas.

But in the aftermath of this major weather event, there will be some thought given to how home values will be impacted by storm damage and floodwaters.

The reality is that Australian property markets typically show remarkable resilience in the face of natural disasters, whether they be cyclones, storms, floods, bushfires or periods of drought.

Locations with a history of major weather events somehow manage to shrug off those impacts and deliver strong price growth, usually after an initial short-term negative impact.

One of the locations affected by Cyclone Alfred was the nation’s unluckiest town, Lismore. The northern NSW town has a history of floods from the Wilsons River, including two major events in 2022 including the record flood in February of that year.

Yet in the past 12 months Lismore house markets have shown remarkable recovery.

The median price for South Lismore fell from a peak of $460,000 around the time of the 2022 floods to a trough of $195,000 by the end of the year. But in the past 12 months, the median price has risen 26% to reach $330,000.

Central Lismore dropped from $575,000 to a trough of $320,000 – but following a remarkable 37% recovery in the past 12 months has reached $505,000 to recoup most of the value that was lost. Lismore Heights was less affected, with values today higher than at the time of the 2022 floods.

Gympie, on the Mary River a little north of the Sunshine Coast, has a history of big floods, including a record event in February 2022. But that most recent disaster caused only a minor pause in the growth of Gympie house prices – with its median price rising 11% to $540,000 in the past 12 months (compared to $310,000 four years ago).

Townsville in the tropical north of Queensland has a history of cyclones and floods, including a major event in 2019 and recent floods in January-February. Yet it has been one of Australia’s busiest markets and a national leader on price growth in the past two years.

Houses are selling is less than two weeks and in the past 12 months most Townsville suburbs have recorded median price rises well above 20%, including some like Garbutt (up 36%) and Rasmussen (33%) lifting more than 30%. Townsville suburbs have averaged price growth of 12-15% per year over the past five years.

And of course Brisbane, built on a flood plain, has a considerable track record of floods but continues to deliver price growth. Its median prices rose 10% for houses and 14% for units in the past 12 months, with the median house price now approaching $1 million – well above Melbourne and topped only by Sydney.

One of the many ways media misinforms Australian consumers is their misunderstanding of the difference between building approvals and actual construction of new dwellings.

Right now, at a time when we have major dwelling shortages and construction costs are so incredibly high, there is a very important distinction between the number of dwelling approvals and the number of homes actually being built.

The difference between the two is quite stark and it speaks to the biggest single problem amid the housing crisis – approvals often are not translating into actual construction of homes, because building costs are prohibitive and projects are simply not viable.

The latest official figures portrayed a significant rise in the number of new housing approvals – and many in news media completely misrepresented what that meant.

One headline by News Corp, the nation’s biggest median organisation, shouted:

Total housing construction reaches record high on new apartments

The article began with: “The total value of new homes being built or homeowners making alternations hit a record high in January.”

And that was all highly misleading.

The ABS data, in fact, said there was a rise in approvals for new dwellings and for alterations and additions. ABS head of construction statistics Daniel Rossi said the total number of dwellings approved in January rose 6.3% to 16,579, following a 1.7% increase in December.

Rossi said: that approvals for units and townhouses drove the overall rise, up 12.7%, to the highest level since December 2022.

The journalist who wrote that inaccurate headline and introduction should have known better because the article quoted a senior AMP economist pointing out that there remained a big gap between building approvals and completions, and between the number of new homes and the annual target of 240,000.

The Australian Financial Review made the same mistake with its headline:

The development tide has turned on apartments

AFR said: “Australia’s apartment slump has passed the worst, after new figures showed approvals of new apartments, townhouses and semidetached homes turning positive on a yearly basis for the first time in almost 2 ½ years.

The AFR quoted several economists at length, declaring that the worst was over and it augured well for the future in addressing the housing shortage.

You have to wonder whether economists speak to anyone in the real world or just look at numbers on their computer screens.

The reality is that approvals are almost meaningless – many approved developments are not proceeding because they are not financially viable.

And that is because the costs of building are so high and buyers cannot or will not pay the price developers would have to charge for the end product.

As HIA economist Maurcie Tapang said: “Despite modest improvements in housing approvals, Australia continues to face a significant shortfall in housing supply.”

HIA is calling on the Federal Government in the lead-up to the Federal Election to help remove the barriers to new housing supply.

And that includes the factors articulated in the recent report from the Productivity Commission, which noted that it’s taking twice as long to produce new homes compared to 30 years ago.

The commission said poor productivity was largely caused by bureaucratic red tape, cost impositions by government and high levels of taxation – which had rendered many approved projects too expensive to build.

The Great Australian Dream still exists, it’s just that - for many - it now means owning an apartment, not a house with a white picket fence.

As property prices continue to grow, the dream of owning a freestanding house has morphed into the dream of owning an apartment - for more and more Australians.

Apartment living is no longer just a financial choice, but a conscious decision to seek out a different way of living - a more affordable and low-maintenance lifestyle.

The percentage of Australians who live in a freestanding house has been declining since the beginning of the new millennium. 

About a third of properties in Australia are now attached properties including apartments. As our population continues to grow and household sizes shrink, apartment living has become more attractive. 

As a result, it has also become a more appealing option for investors as well. The once dominant paradigm of real estate that houses on land showed superior capital growth to apartments is no longer the case. 

As the new edition of the “Rise and Rise of Apartments” report shows, apartment values are now rising faster than house values in most suburbs throughout Australia including regional locations. 

In 2023 apartment price growth was stronger than house price growth in 46% of suburbs nationally; by the end of 2024 that was the case in over 60% of suburbs.

The report, published by Hotspotting in association with national marketing company Nuestar, shows a growing number of important cohorts are pushing demand for apartments higher - including those looking for affordability, downsizing, location, safety & security and a first step onto the property ladder. 

The price differential is a big factor. Even in the most affordable markets, the price difference between a house and an apartment is substantial. PropTrack data as of February 2025, shows Sydney has the biggest gap of 55%; followed by the ACT, 45%; Darwin and Melbourne, 42%; and Perth, 39%.

Growing demand means apartment price growth is tipped to outpace house price growth in a variety of locations in 2025, as it did in many places last year.

Suburbs in which apartments dominate the dwelling mix are now among the most powerful markets in Australia. 

The market share of apartments is now consistently well above 50% of Greater Sydney sales. In Brisbane, apartments account for 37% of property sales, compared with 32% a year ago. But, the most notable growth pattern is in Canberra, with apartments accounting for 47% of sales compared to 32% at the same time last year.

It’s not just owner-occupiers who are emerging as a growing buyer force in apartment markets - investors are also strong. Apartments offer investors more affordable options and better rental yields in desirable locations.

In many of the inner-city precincts in our biggest cities, houses can typically cost more than $2 million, but apartments can be bought for less than half of that price level in the same suburbs, in many cases.

The more affordable entry point generally means that rental yields are significantly higher for apartments, a key consideration in times of still-high interest rates. 

That’s why apartments will be an important consideration for investors seeking opportunities in 2025.

Brisbane was one of the nation’s boom markets in 2024 and likely to do even better this year.

The price data shows that Brisbane delivered a strong performance last year, both with house prices and in particular unit prices – but was third in the capital city growth rankings behind Adelaide and Perth.

Figures from PropTrack and CoreLogic show Brisbane house prices overall were up 10% last year and unit prices around 15%.

In 2025 we expect Brisbane to have another strong year and to overtake those other cities to be the national leader on price growth.

Hotspotting recently completed an analysis of all the major markets across Australia and concluded Brisbane is likely to be the strongest location in the nation for price growth.

Sales activity continues to rise across the Greater Brisbane area, the vacancy rate is well below 1%, rents continue to rise and there is major upward pressure on prices, with listings of properties for sale still close to the lowest ever recorded.

Brisbane is also a standout example of the biggest trend in Australian real estate, the one we call the Rise and Rise of Apartments (a quarterly report we publish in association with national marketing company Nuestar).

More and more buyers of all sorts are opting for attached dwellings rather than houses on land, for myriad reasons including affordability. In the past year, units outperformed houses on price growth in most suburbs across the nation – and in Brisbane this was the case for over 80% of suburbs.

The days when the dominant paradigm of real estate claimed that houses out-perform on capital growth are long passed. 

The Brisbane market is underpinned by a range of important factors: population growth boosted by both internal migrants and overseas migrants, a strong underlying economy, big investment in infrastructure projects and major lifestyle factors.

The Brisbane market will receive additional impetus from preparations for the 2032 Olympics, which necessitates major investment in sports venues, transport systems and tourism & hospitality real estate.

The record shows that cities that host the Olympics receive a significant boost to their property markets, but in the years leading up to the event, rather than following the global spectacle of the Games.

All in all, prospects look good for another strong year for Brisbane real estate – and one that’s likely to see the city leading the national pack.

🏡 Australia's Housing Crisis: Causes & Solutions With housing affordability at record lows and supply failing to keep up with demand, how did Australia's property market reach this crisis point? More importantly—how do we fix it?

In this special episode of The Property Playbook, Tim Graham is joined by an expert panel to tackle one of the most pressing issues facing Australian homeowners, investors, and renters:

🎙️ Panel Guests:

✅ Michael Sukkar – Federal Shadow Housing Minister

✅ Kelly Ryan – CEO of the Real Estate Institute of Victoria (REIV)

✅ Terry Ryder – Australia’s #1 Independent Real Estate Analyst (Hotspotting)

💡 Key Discussion Points:

🔹 The chronic undersupply of housing in Australia

🔹 Why are rental shortages worsening

🔹 The rising cost of construction and why many approved projects never get built

🔹 Government regulations & taxes—are they helping or hurting?

🔹 How state & local policies are impacting the market

🔹 What needs to change to incentivise property investors

🔹 The future of homeownership—will young Australians be priced out forever?