MEDIA RELEASE
The REIV is today calling on 2026 Victorian State Election candidates to commit to more balanced tax and regulatory settings that boost investment confidence in Victoria’s property market and increase the supply of rental properties.
Victoria continues to face significant rental supply pressures, with active rental bonds falling from 681,141 in June 2023 to 664,663 in June 2026 - a decline of more than 16,400, or 2.4 per cent.
Over the year to June 2026, new lettings also fell 7.6 per cent, from 52,214 to 48,271, while Victoria’s population grew 1.6 per cent.
Further, data released by the ABS yesterday confirms the total value of new loan commitments for investors in Victoria dropped by 24.8% over the September quarter 2026, largest quarterly fall on record, to $5.7 billion (lowest since June quarter 2023). Likewise, the number of new loan commitments by investors fell by 21.7% to 9,688 (lowest since June quarter 2023).
New lettings, driven by tenant turnover or additions to rental stock, provide an indicator of rental availability, have declined across both metropolitan and regional Victoria. New lettings have fallen 16.6 per cent in Outer Eastern Melbourne and 12.4 per cent in Southern Melbourne. Regional areas have also recorded significant declines, with Central Highlands-Wimmera down 8.5 per cent and Goulburn-Ovens-Murray falling 7.1 per cent.
Median weekly rents continue to rise as a proportion of median income. Over five years to November 2025, weekly rents in Victoria have risen 33 percent to $560 per week, making up almost 28 percent of the average Victorian’s weekly earnings.
Rental supply pressures have snowballed over the last decade as rental providers faced over 150 distinct rental market reforms, alongside growing property taxation and holding costs. REIV analysis shows land tax payable on a median-priced house increased from $1,597.50 in 2020 to $3,474 in 2024, while the equivalent amount for a median-priced unit rose from $1,057.50 to $2,316. This has caused investors to look interstate for property investment leaving a reduction in the supply of rentals in Victoria and subsequently caused rents to increase for tenants.
Around 72 per cent of Victorian rental providers own just one investment property, while a further 19 per cent own two, highlighting how heavily Victoria’s rental market relies on smaller-scale investors.
According to REIV CEO Toby Balazs, Victoria needs to strike a better balance between protecting renters and encouraging the private investment needed to increase rental supply.
“Victoria cannot solve a shortage of rental homes by making it increasingly difficult and expensive for people to provide them.
“Renters need strong protections but they also need affordable homes to rent. After a decade of increasing regulation and taxation, availability and affordability remain the fundamental challenges facing the market.
“The next Victorian Government must commit to easing land tax obligations on rental providers, introducing targeted incentives that encourage additional rental supply, and pausing further regulatory reform while the impact of existing changes is properly assessed.”
The REIV’s election platform calls for easing land tax obligations on rental providers, targeted tax incentives to increase rental housing supply and a freeze on further regulatory reform.