As Victoria faces a long road to economic recovery, treasurer Tim Pallas announced extra support for the property industry, including land tax waivers, at a Property Council online event last week.
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Three key takeaways:
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Pallas used the Property Council event to announce additional support for the property industry in the form of a waiver of the vacant residential land tax in 2020, a 25 per cent waiver of Melbourne’s car park levy and the deferral of any outstanding levy balances until next year.
The treasurer’s address preceded the Victorian Government’s weekend announcement of a $3 billion business support package which includes new grants, payroll tax waivers and stamp duty discounts for commercial and industrial properties in regional areas.
The government has also announced a $100 million package to support the city’s hospitality and arts sector. To be delivered in conjunction with the City of Melbourne, the package includes a new outdoor dining policy to encourage more open-air cafés, restaurants and bars.
Cressida Wall, the Property Council’s Victorian executive director, welcomed the announcements, which were part of the Property Council’s stimulus plan for Victoria which was released in June.
“We are continuing to work with the Victorian Government on other critical stimulus measures and ways to safely ease the restrictions which are impacting our industry and members, including for real estate and display suites and a safe return to the office,” Wall explains.
In his presentation, Pallas set out the size of the challenge for the Victorian economy.
Having started the year in a strong economic position as “the envy of the nation on the key fiscal metrics, and the leading economy of the nation for eight consecutive quarters,” Victoria now faces the prospect of a peak in unemployment at 11 per cent for the September quarter and an operating deficit of $7.5 billion for 2019/20.
The Victorian property market also started the year in good shape with prices and approvals up from the lows of 2019, and auction clearance rates relatively high. Since March, dwelling prices in Melbourne have fallen by 4.6 per cent, with reduced migration and job losses hurting the rental market.
Pallas pointed to the fast-tracking of new project approvals through the Building Victoria Recovery Taskforce, investment in shovel-ready projects and more social housing and the redevelopment of public housing estates as examples of government action to deliver stimulus to the economy.
Pallas reaffirmed the Victorian Government’s interest in the potential of build-to-rent.
“We want to see build-to-rent working at scale in Victoria, and we’re looking at how to address barriers to investment in this area,” he said.
“We know private capital is keen to invest in Victoria, and in Melbourne, one of the world’s most liveable cities. When it comes to our recovery, we won’t let good ideas or projects sit languishing in red tape, we’ll make them happen.”
While the treasurer didn’t waver on the Victorian Government’s roadmap to reopen the economy from the current stage four restrictions, he did indicate there would be further consultation on issues such as the re-opening of display suites.
“This roadmap is about making sure that we stay one step ahead of the virus and making sure that we don’t have to take another backward step,” he said.
From 28 September, the baseline for large scale construction will increase from 25 per cent of the total workforce to 85 per cent, provided case thresholds and trigger points are met.
For small scale construction sites, contractors will be able to visit up to five sites per week with a maximum of three per day. Early stage land development density restrictions will be increased to 20 workers per hectare.
“In terms of the safe reopening of the property industry, vigilance and care have made it possible for construction to operate successfully through this difficult period, albeit with necessary measures in place to ensure safety. The same caution will enable a gradual and safe reopening,” Pallas said.