In the years prior to the pandemic, Victoria came far closer to living up to the slogan which one emblazoned its number plates ‘The Place To Be’, than it does today.
In 2018-19, it had the fastest growing rate of Gross State Product per capita of any of the major states, running at a rate a full percentage point higher than its rivals New South Wales.
In terms of internal domestic migration, it was one of only two mainland states to have a positive rolling annual figure, as New South Wales, South Australia and Western Australia all experienced outflows, overwhelmingly to Queensland and Victoria.
Meanwhile, the level of state debt as a proportion of Gross State Product (GSP), was roughly middle of the road compared with the other states and well within the range of sustainability, entrenched well within the mid-single digits.
Today, things could scarcely be more different.
Victoria has by far the highest level of state debt to GSP of any state and amidst the collapse in property transactions, an increasingly uncertain fiscal future.
But amidst all of the challenges, there is a silver lining for Victorians in relative terms, the state’s housing costs.
While they are by no means cheap compared with historic norms or when contrasted with some locales overseas, compared to much of the rest of the country they are significantly more favourable.
For example, in Melbourne, the median house rent is $668 per week as of the latest Cotality Quarterly Rental Report.
This is significantly cheaper than the capital city median of $777 per week and far below the $885 per week that is currently being demanded in Sydney.
It’s a similar story for housing prices.
In Melbourne, the median house is $915,100, compared to a capital city median of $1.10 million.
This is by far the cheapest houses of any mainland state capital, with its next closest rivals at the low end of the ladder having a price point of $990,500 in Adelaide and $1.02 million in Perth.
Interesting side note, not that long ago, Brisbane was an escape for Melbournians attempting to get away from high housing prices, but it is now $231,000 more expensive, with a median house price of $1.15 million.
The Silver Lining Delivers
Amidst the cheapest housing prices and rents of any state capital, the net exodus of residents on a rolling 12 month basis out of Victoria to other parts of the country has finally drawn to a close after running for 23 straight quarters.
For the March quarter, Victoria added 504 residents via net interstate migration and 82 on a rolling annual basis.
Where once a Victorian could move to Brisbane, Adelaide or Perth in search of a more affordable home and by extension a lower cost of living, that time has now passed and Melbourne has become the unlikeliest of champions for the nation’s housing cost crown.
While there are certainly other benefits in the other states and other drawbacks in Melbourne, housing costs appear to be trumping other factors in net terms.
