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News.com.au
11 hours ago
- Business
- News.com.au
The truth about Melbourne, Sydney ‘exodus'
In the years since the pandemic first began to unfold, the perception of Melbourne and Victoria more broadly in the nation's collective imagination has changed dramatically. Prior to the pandemic Victoria had the fastest rate of population growth in the nation in both nominal and per capita terms, while the state's economy was one of the fastest growing of any in the nation. Yet despite Victoria's relative economic strength prior to the pandemic, today the perception of Melbourne and Victoria could scarcely be more different. But is that reputation deserved? Or is Victoria experiencing a hangover of pandemic era perceptions that are no longer reflective of reality, years after the pandemic drew to a close. In an attempt to provide a concrete answer to this question, we'll be looking at three quantifiable metrics, comparing today's Victoria not only with the other states and territories, but also with where Victoria was at the eve of the pandemic. Housing In recent years Victoria has often made headlines for an exodus of property investors. Weaker than average growth in housing prices, a lowering of the land tax threshold and higher land taxes have all been put forward as reasons for investors exiting the market. For the sake of argument, we will assume that the rental bond data used to underpin claims of an exodus is correct, despite the extremely high likelihood of seeing the number of rentals in Victoria revised upward. If there has been an exodus of property investors from Melbourne, no real downside is being realised relative to other states and territories. As of the latest data from property data firm SQM Research, Melbourne has the highest rental vacancy rate of any the nation's capital cities and in relative terms has a vacancy rate 83 per cent higher than the average rate of the nation's other capital cities and 42 per cent higher than the national average. This not what you would expect to see if an exodus of property investors was negatively impacting Melbourne's renters. In recent years, an increasingly widespread perception of a mass exodus from Melbourne has developed, arguably as a response to the state's more protracted and more severe lockdowns than the national average. It is correct that population flows in and out of Melbourne have shifted since the pandemic. During the 2021-22 financial year, 24,450 people left Melbourne in net terms as a result of domestic migration. However, the largest loss of residents to domestic migration of any city during 2021-22 was experienced by Sydney, where 49,800 people exited the harbour side city in net terms. Fast forward to the latest data from the ABS which covers up to the end of the last financial year, Melbourne saw a loss of 7580 residents to net internal migration. Meanwhile, Sydney saw a significantly larger exodus of residents to domestic migration, with 41,100 exiting during 2023-24. While Melbourne has certainly seen a major shift from the pre-pandemic norm of domestically driven population inflows, the outflows it is now experiencing are a fraction of what became the norm in Sydney over a decade ago. The labour market When it comes to the labour market Victoria's performance is significantly less impressive. But first some good news, Victoria's unemployment rate is 0.47 percentage points lower than it was at the end of 2019 (4.85 per cent then vs. 4.37 per cent today). The bad news is that despite the strong improvement in the labour market compared with pre- pandemic, its improvement is the weakest of the nation's five most populous states. As of the latest data from the ABS, Victoria also has the highest unemployment of the five most populous states, with 4.37 per cent of the labour force out of work compared the best performing state, Queensland where 3.69 per cent are unemployed. While things are not going as well for Victoria compared with the other states on this metric, there is a silver lining. Since January, the unemployment rate in Victoria has reduced by 0.3 percentage points, even while the unemployment rate in New South Wales and South Australia has increased. The takeaway While Melbourne has seen domestic migration turn negative since the onset of the pandemic, claims of a mass exodus are overstated, at least when put into context with Sydney, which saw 5.4x residents exit to elsewhere in Australia in 2023-24. On the other hand, the news from the labour market is more mixed, unemployment in Victoria is significantly lower than where it was prior to the pandemic, but is 0.31 percentage points higher than the national average. Meanwhile, the best news for Victoria stem from its housing market, where it holds the title of highest rental vacancy rate in the nation and simultaneously the lowest cost house rents of any major city. Victoria certainly faces challenges on the road ahead, most notably from its state budget, as the Allan government attempts to get the state on a more sustainable fiscal path after facing a particularly damaging period during the pandemic. Ultimately, despite its other challenges, Victoria is not facing the problems claimed to the degree that is often perceived and in some important ways Victoria is excelling to a degree unseen in the rest of the nation's large states.
News.com.au
19-05-2025
- Business
- News.com.au
‘More surprises to come': What to expect in Victoria's ‘responsible' state budget
The Allan government is set to unveil its state budget on Tuesday, with analysts anticipating debt to hit $188bn by 2028 as the state tries to claw back spending amid a budget blowout. Premier Jacinta Allan said on Sunday the Victorian public was demanding a 'responsible budget that sets up our state for the future' and relief for the cost-of-living crisis. Treasurer Jaclyn Symes will hand down her first budget on Tuesday and is anticipated to present a projected $600m operating surplus for the 2025-26 budget. This would mark the first time the state's balance sheet has been in surplus since the Covid-19 pandemic. Despite a projected positive balance sheet, the surplus was $900m less than the forecast presented in December last year, the Herald Sun reported. The surpass will also likely be overshadowed by the cost of government wages and major infrastructure projects, including the Suburban Rail Look, which has prompted the federal government to put the Victorian government on notice. In the lead-up to the budget release, the Victorian government has announced it would allocate $5bn for public transport, $61m in stamp duty tax cuts, $772m to expand prison capacity in the wake of its updated bail laws, a $976m injection for regional roads and free public transport for seniors and people under 18. On Sunday night, Ms Symes said there would be 'more surprises to come' but confirmed there were no new or increased taxes. 'The message I heard loud and clear from the business sector, industry sector was no more taxes,' Ms Symes said per the Herald Sun. 'There is nothing in the budget that changes the tax settings tomorrow. 'I am pleased you will not see new taxes in tomorrow's budget.' However, this does not include the emergency services levy, which was passed through the upper house on Thursday and is intended to increase funds for the State Emergency Services (SES), triple-0 and the state control centre. Analysis from Victoria's independent Parliamentary Budget Office indicated that nearly $22m in funding or 368 government programs were set to end this year unless Ms Symes announced an extension on Tuesday. Some of the funding that could find itself on the chopping block includes $2.8m for mental health programs, a $32m Supporting our GPs program and support for alcohol and drug services for Aboriginal Victorians. On Thursday last week, Ms Allan remained tight-lipped about the programs potentially facing the axe and said the government was 'focused on every dollar being invested in what matters most to working people and families'. Ahead of the budget update, Ms Symes kept quiet about the forecast net debt of $188bn over the forward estimates but confirmed it would not surpass $200bn. 'The aggregates will be revealed tomorrow,' she said. 'They will not start with a two. 'From here, net debt will continue to fall as a share of the economy, and we will see continued surpluses in the years to come – allowing us to continue to provide services and infrastructure that Victorians need.'
