Investor group says Victorian policy settings have weighed on property values
Melbourne homeowners have recorded far weaker capital growth than owners in other major Australian cities over the past four years, according to a new report from the Property Investors Council of Australia (PICA).
The report found Melbourne dwelling values rose by 3.5% between 2022 and 2025. Over the same period, Perth values increased by 77%, Adelaide by 54%, Brisbane by 47% and Sydney by 16%.
| Annual dwelling value growth by city | |||||
|---|---|---|---|---|---|
| City | 2022 | 2023 | 2024 | 2025 | Q1 2026 |
| Perth | +3.6% | +15.2% | +19.1% | +15.9% | +7.3% |
| Adelaide | +10.1% | +8.8% | +13.1% | +8.8% | ~+3.9% |
| Brisbane | –1.1% | +13.1% | +11.2% | +14.5% | ~+4.6% |
| Sydney | –12.1% | +11.1% | +2.3% | +5.8% | ~+0.3% |
| Melbourne | –8.1% | +3.5% | -3.0% | +4.8% | –0.6% |
| Source: Cotality HVI for annual change as at December | |||||
PICA said the gap had left Melbourne property owners with unrealised gains of between $98,000 and $590,000 per dwelling, depending on the capital city used as the benchmark. It said the impact across Greater Melbourne’s estimated 2.2 million homes could amount to hundreds of billions of dollars in lost household wealth.
“Melbournians who own property are being shortchanged by this current Labor Government to the tune of hundreds of thousands of dollars; and according to the government, they think that’s fine because it’s making housing more affordable,” said Ben Kingsley (pictured right), chair at the Property Investors Council of Australia.
The organisation attributed Melbourne’s weaker performance to a range of Victorian policy settings. It cited the COVID debt levy, lower land tax thresholds, broader vacant land taxes, short-stay levies, more than 150 rental reforms and higher property-related taxes, levies and charges.
PICA said these measures had encouraged more investors to sell and had reduced investor demand in the Melbourne market, affecting values for all property owners.
The report also pointed to wider economic pressures in Victoria, including weaker wage growth, higher unemployment among mainland states, declining per capita output and record state debt.
“Property owners expect and plan for most of their future wealth to come from the property they own,” Kingsley said. “That’s why they borrow money and pay the interest cost to get into the market.
“If the State Government continues to manipulate the market, these Melbournians will be significantly worse off financially compared to their counterparts in other states.”
PICA called on the Victorian government to review its housing and property tax settings, saying policy changes were needed to restore confidence and encourage investment.
“Under the current State Government’s approach, come retirement, when they go to downsize their property, they can kiss goodbye any financial windfall — there goes a lot of the financial security they planned for and of any dreams of a holiday apartment on the Gold Coast, a new car, caravan or both,” Kingsley said.
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