The Victorian government is looking towards build-to-rent models, established in both the England and the USA, to provide new, more affordable housing. The model is popular in areas where people are either needing or choosing to rent for long periods.
The Daniel Andrews government plans to incentivise the build-to-rent sector by cutting taxes and speeding up the approval process for permit paperwork. In addition, any projects encountering delays may be referred to an advisory committee.
Foreign investor stamp duty surcharges will also take a snip, as will vacancy tax.
The planning and tax changes announced last September will encourage longer lease periods for apartments, and will incentivise the building of homes closer to amenities.
The initiative aims to make positive changes to housing affordability over the course of 2019 and 2020.
In discussion with The Age newspaper, founding member of Housing All Australians and ex-high-rise developer Robert Pradolin warned of the “time bomb” that is Australia’s housing market, where developers depend on property prices for profit and fail to deliver on affordability.
“Without providing shelter for all, how can we aim to be a prosperous, creative, innovative and inclusive country?” said Mr Pradolin. “We are heading for a lose-lose scenario unless we supply the basic fundamental need of shelter for all, rich and poor.”
The first build-to-rent project to commence in Victoria is a 60-storey apartment block on City Road, Southbank. The high-rise tower with glass exterior is to be developed by tier-one construction company Grocon.
Grocon spokeman Christian Grahame announced his company’s support for the new initiative.
“We support the introduction of build-to-rent in Victoria and believe it will be a thriving sector in the future, providing housing, community creation, investment and employment for our growing state.”
A number of other permit applications are currently in progress.
Much like Sydney, Melbourne’s housing affordability crisis has been a hot topic in recent years, and is expected to most-strongly affect Australians under-thirty, who are likely to seek housing through long-term rentals.
Australian real estate firm Stockland is also believed to be dipping its toes into the emerging build-to-rent industry, as it looks towards introducing projects into its pipeline.
“Build-to-rent is a new opportunity for Stockland” Stockland managing director Mark Steinert, “and we note that there is good demand for affordable rental properties.”
“[Affordable rentals are] critical in terms of the potential benefits to key workers and ensuring the continued inclusivity and liveability of our cities and towns as Australia’s population grows.”
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