The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
JOIN US FOR A ONE-DAY DEEP DIVE INTO THE FUTURE OF THE INDUSTRIAL SECTOR
FIND OUT HOW THE INDUSTRIAL MARKET IS CHANGING IN 2026
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
10
print
Print
ResidentialAna NarvaezTue 06 Nov 18

Property Market Slump Cuts $2.4bn Hole in Victorian Budget

974b2bcb-956a-4d9a-971c-880fb808442c

The Victorian government budget has taken a $2.4 billion hit in the lead up to the election, with property market uncertainty affecting the Andrews government bottom line.

The Victorian economy continues to outperform the rest of the nation, as stronger than expected consumer spending and business investment offset declines land transfer duty revenue.

The figures were published in a pre-election budget update released by the Department of Treasury and Finance on Monday.

Stamp duty on homes accounts for 30 per cent of Victoria’s revenue.

Treasury warned that moderation in the residential property market “could prove deeper” than currently factored into the forecast.

“Particularly if prompted by tighter access to credit, rising borrowing costs or an economic downturn.

“A weaker housing market could lead to softer household sentiment, lower consumption and dwelling investment and slower growth in employment, wages and real GSP.”

--– 2018 Victorian Pre-Election Budget Update.

Related: NSW Announces Biggest Stamp Duty Reform in 30 Years

Property-related taxed ‘highly volatile’

Despite cutting a $2.4 billion hole in government coffers, treasury revealed that land tax revenue has been revised up by $909 million over the next four years.

Treasurer Tim Pallas said on Monday that the government has taken a “conservative” approach to softening in the property market.

“The worst thing any government can do when there is uncertainty is to pull the market down or wind back investment,” he said.

Treasury said that the property-based tax revenue sources are “subject to unique risks and have historically been volatile”.

“If property market sentiment were to weaken faster than anticipated or is more prolonged, or mortgage interest rates rose more quickly than currently expected, revenue from property-based taxes may be weaker than forecast.”

Victoria's Housing Industry Association executive director Fiona Nield agrees.

“Stamp duty is notoriously cyclical, and the state’s fiscal position is heavily exposed to any downturn in stamp duty receipts,” Nield said.

“While the decline in overall stamp duty receipts will not reduce the cost impost on individual buyers, it will certainly impact on the Victorian government spending and activity.”

ResidentialAustraliaFinancePolicyReal EstateSector
AUTHOR
Ana Narvaez
The Urban Developer - Editorial Director
More articles by this author
ADVERTISEMENT
TOP STORIES
Bee Bricks hero
Exclusive

Beyond Green: The Rise of Net-Positive Architecture in Australia

Clare Burnett
7 Min
Exclusive

Central Element Hotel Debut Spearheads Oxford Street Renewal

Taryn Paris
8 Min
London skyline near the walkie talkie tower showing the 85 gracechurch street development.
Exclusive

Basilica to Business: London Office Tower’s Historic Rework

Renee McKeown
6 Min
Hotel Indigo Adelaide hero
Exclusive

Neighbourhood Hotels Reinvent Urban Hospitality

Clare Burnett
5 Min
Melbourne CBD empty site
Exclusive

Melbourne Developers Hit Back at Mayor’s ‘Lazy Landlord’ Plans

Leon Della Bosca
7 Min
View All >
Bee Bricks hero
Exclusive

Beyond Green: The Rise of Net-Positive Architecture in Australia

Clare Burnett
Development

Sydney to Host Australia’s Leading Commercial Real Estate Event

David Di Marco
Leppington hero
Residential

Rezoning Sought to Pave Way for $340m Leppington Scheme

Clare Burnett
The $340-million plans would rezone the 3.8ha site from a business park to make way for a mixed-use precinct…
LATEST
Bee Bricks hero
Exclusive

Beyond Green: The Rise of Net-Positive Architecture in Australia

Clare Burnett
7 Min
Development

Sydney to Host Australia’s Leading Commercial Real Estate Event

David Di Marco
4 Min
Leppington hero
Residential

Rezoning Sought to Pave Way for $340m Leppington Scheme

Clare Burnett
2 Min
Providence Lifestyle plans for Haynes Perth just outside of Armadale
Land Lease Communities

Providence Lifestyle Plots Fifth Over-50s Perth Community

Renee McKeown
2 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/softening-property-market-a-threat-to-victorian-state-budget