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The Allan government revealed a 500-unit project that will add to the state capital’s growing pipeline of build-to-rent (BTR) projects.
The $333.5 million project from Mirvac is delivered in partnership with the City of Melbourne and PDG Corporation. It boasts 490 BTR apartments and 49 affordable housing dwellings, and represents another milestone in the Victorian government’s mission to deliver more BTR homes than any other state.
Figures from the state’s Department of Transport and Planning indicate the uptake of BTR projects in the state is rapidly expanding, with 12,000 apartments either under construction or with planning for approval.
Newly appointed Victorian Premier Jacinta Allan said the state’s position as the nation’s BTR leader will only be advanced with its Housing Statement set to “turbocharge affordable rental options as part of the 800,000 new homes we need to build over the next decade”.
Recently published analysis from Knight Frank revealed just under half (45 per cent) of the nation’s BTR pipeline is currently within metropolitan Melbourne suburbs, with many lying in close proximity to public transportation.
Earlier this month, data from CBRE highlighted the difference in capital value growth between suburbs lying near the NSW capital, Sydney’s metro line, versus those that aren’t. Dubbed the city’s “metro-fication”, values in metro line suburbs, on average, grew 5 per cent higher than non-metro regions over the last decade.
This is most glaringly obvious when comparing the metro line suburb of Castle Hill’s 72 per cent capital growth over the last decade to the non-metro suburb of Baulkham Hill’s 49 per cent.
CBRE’s research paints a clear picture about the benefits of residences near transport services, perhaps explaining why a larger portion of Melbourne’s BTR lies close to popular train stations and bus routes.
As demand for BTR soars in Victoria, the Allan government is proposing changes to facilitate the fast-tracking of approvals for such projects that meet the requirements of the expanded Development Facilitation Program.
Another BTR development was recently approved by the state’s Minister for Planning Sonya Kilkenny in Kensington, with the project expected to deliver 447 dwellings to the state’s market, including a number of affordable houses with a 10-year lease tenure.
Eligible BTR developments completed and operational from 1 January 2022 until 31 December 2031 will also receive a 50 per cent land tax concession for up to 30 years and a full exemption from Absentee Owner Surcharge.
BTR developments have become in vogue recently, especially in light of Australia’s severe housing shortage and the subsequent rental crisis such an environment has created.
The industry also got an incentive earlier in the year when the federal government announced its decision to halve the withholding tax rate from 30 per cent to 15 per cent for eligible BTR projects for income earned from managed investment trusts.
Such projects are viewed as a potential solution to the nation’s housing shortfalls, as indicated by Ms Kilkenny, who concluded:
“As long as rental supply is low, rental prices will stay high. That’s why we’re approving and delivering more homes for renters in established suburbs, close to jobs, transport and services, and ensuring they include affordable housing for Victorians who need it most.”
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