During Monday’s State Budget, Victoria Treasurer Tim Pallas faced the reality of having to write down an unprecedented $5.2billion in expected but unrealised stamp duty revenue. Despite this, the budget suggests there is an upturn in the making.
During the budget delivery, Mr Pallas acknowledged that the property market downturn may not yet be over but suggested the pace of the decline was slowing. He said, “I’m not saying we’re through the woods yet, by any means. I suspect we’ve probably got at least 12 months to go.”
According to The Australian, Mr Pallas expressed hope that two forecast interest rate cuts by the Reserve Bank, along with an easing of credit restrictions by the Australian Prudential Regulation Authority, would help drive a recovery in stamp duty revenue to a forecast $7bn in 2022-23, up from $6bn this financial year.
These forecasts suggest the Victorian Government is optimistic of a steadying improvement in the market beyond the back end of this year and an increase in available properties along with an increase in capable buyers to purchase them.s
The budget papers state, “New building approvals have fallen in recent months, particularly in the higher-density apartment market. As a result, dwelling investment is forecast to decline in 2019-20 and 2020-21… Nevertheless, the downturn in the current cycle is expected to be modest compared with previous cycles.”
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