Residential rebound poses supply challenge

Residential capital growth expectations within Victoria have increased by 25 index points for the March 2020 quarter according to the ANZ/Property Council Survey released today. 

The anticipated uplift in house prices poses a challenge for housing affordability with last year’s new residential supply figures delivering significantly less supply than required to meet Victoria’s growing population.

Adding concern to future supply pipelines was the decision by the State Government in the mid-year budget to write down land tax revenue from $3.6 billion to $3.5 billion.

According to Cressida Wall, rising residential capital growth expectations combined with the Government’s decision to downgrade the land tax revenue estimate point to constrained new housing supply.

“The return of buyers to the market and improving house prices, without new supply, means house prices will continue to rise and compromise affordability further.”

Constrained supply isn’t only posing a challenge to house prices, confidence in the State Government has also fallen into the negative for the first time in 12 months. Expectations around state economic growth have also flatlined.

“We urge the government, to take the survey results as a call to action,” said Ms Wall.

“If we are to seriously address affordability in Victoria, government needs to support industry in delivering supply required by the market. This requires accelerating the land release process and supporting the delivery of denser housing projects, especially Build to Rent”.

Media contact: Emily Young | M 0475 161 328 | E [email protected]



Overall Context

Quarterly Result

Quarterly Change


Confidence Index



124 to 124

Equal second highest market tracked

State Economic Growth



3.3 to -0.2

Negative for the second time in the last year

State Govt Performance



2.7 to -4.1

Negative for the first time in 12 months

Debt Finance Availability



10.2 to 7.4

Third consecutive quarter of expected credit availability

House Capital Growth



20.6 to 45.8

Highest growth expectations on record for Victoria

Forward Work Schedules



35.6 to 36.1

Strong positive expectations

Staffing Levels



22.9 to 15.8

Largest quarterly fall in expectations on record