Debunking the myth that no one is investing in Victoria

I recently came across an article by PropTrack Senior Economist Angus Moore, entitled “Investors are busy buying up a storm in all but one state”.

“Victoria is the key exception,” he says.

This is yet another article that plays into an ongoing media trope about the southern state.

You know how it goes - Victoria’s an economic basket case, and so to help ease debt, the state government has gone after an easy target - property investors, saddling them with higher land taxes, levies, unreasonable property upgrades, etc..

As a result, angry investors are deserting Victoria in droves, and new investor buyers have been scared off.

You’ve seen those stories, haven’t you?

Guess what?

They are NOT true.

In fact, the reverse is the case.

The latest ABS data shows that while the number of new loans taken out by investors is falling across Australia, the number of new investment property loans in Victoria is growing healthily.

And a state government decision to extend a key property tax concession for at least another year points to continuing healthy investor interest in Victoria.

The details

The Australian Bureau of Statistics' latest quarterly Housing Finance data shows the total number of new loan commitments for dwellings in Australia fell 3.5% in the March quarter 2025.

The number of new owner-occupier loans fell 3.4%, while the number of new investor loan commitments fell 3.7% in the quarter.

However, if you dig into the state-by-state breakdowns, a very mixed picture across Australia emerges.

While new investor loans plunged 4.4% in Western Australia, held steady in Queensland and saw a small bump up in New South Wales, new investor loans soared by 3.9% in Victoria in seasonally adjusted terms.

11,289 new investor loans were approved during the March quarter of 2025, up from 10,860 in the December quarter of 2024.

In fact, if you look carefully at the figures for Victoria, the number of new investor loans has been growing steadily each quarter since June 2023 and now sits 23% higher.

If you look at the ABS’ other “trend” measure, it’s a similar story.

11,167 new investor loans were taken out in Victoria in the three months to the end of March 2025, up 1.7% on the previous quarter and 19% above new loan commitments in June 2023.

So much for an “exodus” of investors…

What’s driving investor growth in Victoria?

There’s no doubt some investors in Victoria with older properties have been put off by the state’s new land tax regime, other taxes and charges, and new minimum standards for rental properties.

They’ve put these older places up for sale.

Many of these ex-rentals have been bought by first-home owners.

I think it would be hard to argue that’s a bad thing.

I also think it’s hard to argue against landlords providing a home for a tenant which has hot water, a decent electrical switchboard, a working heater, a toilet, a kitchen with a stove that actually works, adequate lighting, locks on external doors and windows, that is free from mould and damp and is structurally sound.

Unless you fancy yourself as a slumlord…

What’s clear is that in the past year, the number of investors flocking to Victoria to buy new off-the-plan homes is soaring.

Many have been attracted by the Victorian state government’s tax concession for new apartments, units and townhouses.

This is a stamp duty concession claimable by any buyer (owner-occupiers, first-home buyers or investors) and not subject to any thresholds.

And that rush to invest in Victoria may well continue, with the state government announcing an extension of the scheme for another year (to October 2026), at a cost of $61 million.

Since the introduction of the stamp duty concession last year, the state government estimates that off-the-plan unit buyers in Victoria have saved $24,517 on average.

Given that Victoria usually has one of the most expensive stamp duty regimes in Australia, this concession presents an ideal opportunity to invest in Melbourne, Australia’s largest and fastest-growing city.