Melbourne developer Kris Daff is pressing ahead with a second build-to-rent development, offering residents the option to buy their apartment at the end of a five-year rental period.
The 21,779sq m development, located at 15 Thompson Street at Kensington in Melbourne's inner-north, will use the Assemble platform which offers residents an option to buy their apartment.
Assemble's second “rent-with-the-option-to-buy” project follows the success of its $60 million maiden development, 393 Macaulay Road, a 73-apartment development recognised as one of the first to be rolled out within Australia's fledgling build-to-rent sector.
The developer's latest project, to be built on a 3,895sq m site, will provide 198 apartments across two Hayball-designed mixed-residential buildings while targeting a 7.5 stars NatHERs rating.
Assemble managing director Kris Daff, who will be joining The Urban Developer to discuss the Assemble model on Thursday, says that housing security is more important than ever.
“In these unprecedented times, housing security is top-of-mind for many Australians and that places even more importance on our model, which has been purpose-built to provide residents and homeowners affordable, accessible housing,” Daff said.
Under its model the purchase price is agreed upfront and the five-year lease is also agreed upfront, with a one-month bond required.
After five years, residents can exercise the option to purchase the property at the fixed price, or walk away with their savings intact if they opt not to exercise their purchase option.
Assemble will manage the application process for its new project through an automated ballot system, creating an “even playing field” for all pre-approved applicants.
“Our focus on affordability allows people with household incomes of $60,000 and above a foothold in the property market,” Daff said.
“Through our model, the need for prohibitive up-front cash deposits are negated by offering residents with stable rental, ample time to enjoy their home, all while working towards a savings goal.
“Residents can then decide if it is the right financial and lifestyle choice before buying into the project.”
Developers, housing advocates and policy makers around the country are keen to identify the necessary means to establish a broadscale build-to-rent sector as homeownership contracts.
Only a limited number of developers have entered the sector due to tax constraints, planning concerns and uncertainty surrounding legislation.
Despite the challenges, CBRE estimates that the nascent build-to-rent sector is gaining momentum with approximately 12,000 build-to-rent units at varying stages of completion in Australia.
According to ABS dwelling projections, close to 1.6 million homes will be needed to house Australia’s growing population—an additional 500,000 rental properties over the next 10 years.