Understand the Melbourne market and the impact of recent legislation on private investment, with Mark Errichiello – Ep. 91

In this latest episode of the Geared for Growth podcast, Mike is joined by Co-Founder and Director of Master Advocates, Mark Errichiello, to discuss the Melbourne property market and how the sector has been impacted over the last few years, following the reality of stringent COVID lockdowns and legislative changes.

Recently appointed to the Real Estate Institute of Victoria (REIV) Board of Directors and with a myriad of property credentials to his name, Mark is highly qualified to share his knowledge and insights into one of Australia’s largest capital cities, and the ramifications of recent political decisions.

Mark and Mike talk to the current status of the Melbourne market, and break down the varying markets, whether it be closer to the CBD or further afield, and the types of yields investors are currently expecting. Mark describes how the market is still recovering from the mass exodus experienced in Melbourne in the wake of the pandemic and explains how it’s been compounded by increasing prices and interest rate rises.

In this episode, Mike and Mark look at the median price point in Melbourne and compare it to that in Sydney and in Brisbane. They also consider investor appetite for purchasing in each city and look at why Melbourne is lower than its counterparts in NSW and QLD. Mark talks through recent land tax changes and the minimum standards legislation that was brought in in 2021 and notes the impact on investor demand for properties and the flow-on effects to the housing and affordability crisis.

This riveting conversation provides a unique insight into one of the more volatile markets in Australia at present, and clearly highlights the gap between government rhetoric and incentivising private investment. Regardless of where you are based and the property markets you focus on, you will be sure to benefit from tuning in to this podcast.

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Know more about Mark Errichiello and Master Advocates:

https://masteradvocates.com.au/

 

In this latest episode of the Geared for Growth podcast, Mike is joined by Co-Founder and Director of Master Advocates, Mark Errichiello, to discuss the Melbourne property market and how the sector has been impacted over the last few years, following the reality of stringent COVID lockdowns and legislative changes.

• The current status of the Melbourne property market
• Is inner Melbourne still a viable option for property investors?
• The yields being delivered by investment style houses and townhouses
• The median price points in Melbourne, Sydney and Brisbane
• The minimum standards legislation introduced in Victoria in 2021
• The impact of COVID lockdowns in Melbourne on property investment
• Land tax changes leading to higher than expected land tax bills
• The outlook for housing supply in light of the challenges facing investors

“Post Covid, (Victoria is) still recovering from the mass exodus and other areas of construction and government affecting interest rate changes, affecting everyone nationally but definitely affecting investors in Melbourne as a whole” Mark 1:25

“We’ve got so much land geographically to improve infrastructure and expand the suburbs as compared to other capital cities that might be landlocked” Mark 7:48

“That’s what scares most investors is the bill shock of what needs to be done, the vacancy loss, getting the tenants out while it’s not at standard and then the loss of holding costs with high interest so it was just too many things compounded each year when there should have been good policy discussions about how do we incentivize investors to keep supplying the market” Mark 18:15

“That’s supply coming out of the market plus long term investors and builders – we deal with a lot of smaller developers, four to six unit sites, their costs to acquire, risks of not being able to get lending for construction at reasonable rates, second, third tier lenders or no lending at all for construction, and other holding costs they just can’t supply the market with investment property anymore” Mark 20:56

“(We need to) create policies that make stronger incentives for investors and private ownership and supply the rental market – with more supplying the rental market and private rental market with private owners will naturally reduce the cost of rental properties and keep it at a more even competitive rates” Mark 25:04

“There’s going to be a void with the amount of private investors looking to leave the market with the expenses and pressure on them from not just the land taxes, the interest rates, the other maintenance issues and costs of retaining an investment property” Mark 27:04

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