Victoria is leading the nation in Build-to-Rent (BTR) housing developments, with state incentives helping to expand rental options for people at all stages of life.
The BTR model creates homes for the rental market instead of selling to individual buyers and is providing Victorian renters with high-quality and well-maintained homes on secure leases.
Melbourne is home to more than half of all BTR projects completed in Australia last year and 83 per cent of the total number of units built – 1,600 in total. Completed projects include Realm Caulfield, Home developments in Southbank and Richmond and Mirvac’s LIV development at Queen Victoria Market.
Realm Caulfield, owned by global real estate giant Blackstone, was designed by ARM Architecture and features 437 apartments ranging from studios to three-bedroom homes across eight buildings. Since opening in November, 60 per cent of units have been leased to tenants ranging from young singles to couples in their 80s.
Melbourne is also leading ongoing BTR expansion with more than 7,100 units either under construction or with planning approvals – 63 per cent of the national total.
These developments include Home in Docklands, LIV in Docklands and Brunswick, Greystar in South Melbourne, Fitzroy, South Yarra and Kensington, Local in Kensington and South Melbourne, Indi in Footscray and Southbank, and Altis/AwareSuper in Preston, Melbourne and Moonee Ponds.
The Andrews Labor Government announced land tax concessions in 2020 – which we extended in 2021 – to encourage developments for long-term renters.
In Victoria, eligible BTR developments receive a 50 per cent reduction on the taxable land value for land tax and a full exemption from the Absentee Owner Surcharge for up to 30 years.
Reforms adopted by the Albanese Government in last month’s Federal Budget reverse 2019 legislation that doubled the Managed Investments Trust withholding tax rate from 15 per cent to 30 per cent on payments to foreign investors from residential housing income. Overseas investors are the BTR industry’s primary funding source.
Quotes attributable to Treasurer Tim Pallas
“Build-to-Rent has been a real winner in Victoria. It’s a growing market and it’s creating affordable, quality homes for Victorians.”
“We recognised Build-to-Rent’s potential early on to create more housing options for Victorians. It’s great that the Albanese Government has come on board with further incentives.”
Quotes attributable to Blackstone Australian Head of Real Estate Chris Tynan
“Build-to-Rent offers tenants flexible leasing terms, long-term rental security, and the opportunity to be part of a resident community.”
“Projects like Realm have the potential to play a significant role in Australia’s housing market, addressing the growing demand for professionally-managed, rentable homes.”
Reviewed 01 June 2023