Melbourne property values have continued to climb in the three months to May 2007, with Residex recording capital growth of 4.81% to a median property price of $410,000. In regional Victoria, the median property value sits at $243,500, with slow capital growth of 1.25% in the three months to May 2007.
The rental market remains strong across the board in Victoria, with vacancy rates dropping to record-low levels and rents increasing in both metropolitan and regional areas.
"Vacancy rates are very tight at the moment – even in the outer suburbs, vacancy rates are going down," says Harvey Cohen, president of the Property Owners' Association of Victoria.
Cohen says the situation with residential rental properties in Victoria is "very different" to other states, as various restrictions are in place to slow down the impacts of rising rents.
"As a landlord in Victoria, you need to give 120 days notice to evict a tenant without having a reason, if that tenant is not on a fixed-term lease. But in NSW, for example, you only need to give 60 days notice," Cohen says.
Cohen says that land tax rates are still prohibitively high in Victoria for the average investor, and he believes "structural changes" to the current system are required to attract more buyers to the Victorian property market.
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