The Block serial buyer Danny Wallis, REIV reveal landlord fears for Vic budget, what it would take to win them back

A series of Allan government policy and budget moves impacting investors have been blamed for a more than 20,000 landlord exodus in the state.

Victoria’s top real estate industry group has revealed they fear landlords will be hit again in the state’s 2025-2026 budget next week.

It comes as The Block serial buyer and prolific property investor Danny Wallis has revealed the state government has broken the trust of landlords and can no longer hope to stop an exodus that has wiped more than 20,000 rental properties from the state.

Last weekend Mr Wallis sold his fourth investment property since the Allan government announced a land tax increase for the start of 2024, and expects he will have divested six properties from his portfolio by the end of this year.

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The 6 Gray Lane, Albert Park, property fetched $2.15m at auction.

He still retains about 10 homes bought from hit reality renovation show The Block as part of his expansive investment property list, which also includes homes that have been made available to house families getting treatment for kids with cancer via the My Room Children’s Cancer Charity.

But the tech entrepreneur said the only homes he would buy in the state today were now the high-end listings from The Block, and only then because they come with tax benefits that outweigh the levies implemented by the state government.

Danny Wallis has warned he believes the Victorian government has pushed landlords and invesators in the state too far and cannot win them back. Picture: Jake Nowakowski.

The 6 Gray Lane, Albert Park, investment sold by Danny Wallis last week.

He is now selling whenever tenants leave his investments, and in most cases not to other investors — meaning they are being lost from the rental market.

In the September quarter of 2023 Homes Victoria reports show there were 671,109 active residential tenancy bonds across the state. The latest data in December last year showed just 649,978, reflecting a 21,131 decline from the peak of available rental homes in the state.

Earlier iterations of the report reflected a 677,492 peak in September 2023, but have been revised.

The exodus has widely been blamed on land tax tweaks implemented by the Allan government at the start of 2024.

“I don’t think they can do anything to stop it, the trust is broken,” Mr Wallis said.

“I’m expecting the state budget will be hitting landlords again, this government seems to hate landlords.”

Real Estate Institute of Victoria president Kelly Ryan said she too held concerns.

“We do have concerns around the investment side,” Ms Ryan said.

“The new treasurer, in one of her first media engagements, said landlords are rich and can afford the land tax.

“If that flows through this budget, that would be a concern as we know the majority of investors are school teachers, and nurses and tradespeople.”

State treasurer Jaclyn Symes at home in rural Victoria. Picture: Jason Edwards.

She added that one of the best things the next budget could do for rebuilding investor’s confidence in Victoria, and to help build a larger supply of rental homes, was to leave landlords alone.

“No announcement is an announcement when it comes to the investor market at the moment,” Ms Ryan said.

“If they can slow down the pace of change, that’s a big thing for the market. Give them a chance to catch their breath and get their heads around things.”

Noting more than 150 reforms made since just before the pandemic, many of them requiring expensive upgrades to homes, she said ongoing budget and policy tweaks targeting landlords had resulted in many being forced to sell.

Ms Ryan added the most important step the government could take would be to use land tax as an incentive scheme to encourage longer-term availability of rental properties by providing discounts to investors who keep homes available for tenants for extended periods.

While that would “make things better than they are”, Ms Ryan said it wasn’t clear if it would be enough to stop the tide of investors selling up.

REIV chief executive Kelly Ryan has concerns over what the tate budget could hold for landlords, but has raised policy alternatives that could help slow their exodus.

Real Estate Buyers Agents Association of Australia Victorian representative Matthew Scafidi said the government could win some investors back by relaxing tax burdens on those who only held one home – while raising the cost for those who own large numbers.

“If you have one, you shouldn’t pay as much land tax, and if you own 10, you would pay more — as that person is running that as a business,” Mr Scafidi said.

“And the mum and dad who have bought an investment property … they can’t afford it.”

The Abode Advocacy Group founder said with instances of land tax going from $5000 a year to $30,000 for some investors, forced sales had been inevitable.

Mr Scafidi said interstate buyers were now eyeing Melbourne as an alternative to Sydney, Brisbane, Adelaide and Perth, where prices had comparatively surged during the past two years.

Mr Wallis said the interstate investors were probably tenants’ best hope for more rental choice in the future, but warned they too could be scared off if the government pursued investors again in next week’s budget.

“They are thinking it’s easy money, but they’re not coming at the same rate as others are leaving,” Mr Wallis said.

“And they don’t realise what they are going to get hit with.”

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