Build-to-rent projects can ease our housing crisis
Victoria is growing, and
fast — by 12,000 people a
month. That’s 35,000 more
people a year than NSW. And
Melbourne is growing faster than
any other Australian city.
While it’s nice that Victoria is
Australia’s favourite state, and
home to our most desirable capital
city, we need to get growth right.
We need new infrastructure
connecting our towns and cities
and a greater range of housing
choices at lower price points.
Victoria also needs a fairer share
of federal tax dollars and additional
performance-based resourcing for
state agencies and councils to
improve planning, roads and public
transport, design and quality of life,
especially in new developments.
On the voluntary side, we need
to see more use of the Green
Building Council’s Green Star —
Communities rating to improve
liveability. Planning, too, deserves
a discussion in itself.
But now we need ideas to create
more affordable housing for new
arrivals and those who can’t afford
a mortgage. Housing choice is
most necessary in greater
Melbourne, where nine in 10
arrivals choose to settle.
House prices in Melbourne
have increased by 50 per cent since
2012, according to the Grattan
Institute. So an increasing number
of Victorians will rent.
Some will rent for life, and many
will switch from between buying
and renting. We need to increase
the range of choices.
Research by PwC revealed that
one in three Australians is in the
rental market. For these people,
rental affordability, quality of
accommodation, a sense of
community and the length of
residency were key concerns.
The way to reduce rental costs,
improve building efficiency and
give people the choice of a secure
rental home for longer?
As the Herald Sun has reported,
build-to-rent, or BTR, is a solution
that has worked in the United
Kingdom and the United States,
where hundreds of thousands of
BTR homes are built each year.
Some of Australia’s major
developers, such as Lendlease, are
BTR sector leaders overseas.
Here, Mirvac, Stockland and
Grocon are also primed to enter
Think scores of apartments.
BTR provides better homes more
cheaply, and with a greater security
of rental tenure.
How? A superannuation,
property or investment fund builds
a large number of apartments.
Rather than selling, the fund offers
long-term leases to families who
can personalise their own homes.
Funds that invest in build-torent
also have an incentive to
further improve maintenance and
energy efficiency ahead of the
market because they are present
over the lifetime of the
communities they create.
Kick-starting the build-to-rent
sector in Victoria will require
government leadership, using the
same type of fiscal and planning
improvements implemented in the
US and the UK.
In Australia, many of these
policy levers, beyond our nationalmanaged
investment regimen and
GST credits, are individual state
These include density, planning
efficiency, and land tax caps for
The NSW government has
found 50 per cent of renters in
Australia move home every two
years, more than in any other
The need for greater diversity of
affordable housing options has the
NSW and Queensland premiers
and treasurers looking at BTR.
Helpfully, so is the Victorian
Hundreds of millions of dollars
of investment is waiting for a buildto-rent
platform in Victoria.
Much of this money will come
from global pension funds and local
superannuation funds seeking a
stable long-term income stream in
the Australian market.
With the right policy mix,
Victoria can take pole position
on greater housing choice and a
more secure and affordable rental
Build-to-rent is a no-brainer for
Victoria, and now the race is on.
First published in the Herald Sun, 10 April 2018.