UDIA Weigh in on Victoria’s Build-to-Rent Sector


By Danni Addison, CEO of the Urban Development Institute of Australia (Victoria)

The build to rent model has been at the centre of much discussion across the Australian property market of late. The concept, which has been touted as a silver bullet solution to ease housing affordability pressures, has been adopted successfully in the US and the UK, where it’s often called the "private rental" or "multi-family" sector.

Build-to-rent (BTR) refers to residential development, usually apartments, built specifically for long-term rental purposes, rather than built-to-sell to individual owner-occupiers or to investors who buy-to-let.

Developers retain ownership of the properties, typically in partnership with a large institutional investor. A single landlord manages all the leases, repairs and amenities, while tenants are often provided with a long-term tenure agreement, enabling a greater sense of stability and security for renters.

The build-to-rent model offers several potential benefits, particularly for cities like Melbourne which face serious housing affordability issues due to unprecedented demand and a series of constraints hindering supply.

According to UDIA Victoria’s Residential Development Index, Victoria experienced a housing supply shortfall of approximately 9,000 dwellings throughout the last two financial years -- an alarming figure which shows we're simply not building enough new housing to accommodate the growing population.

Models which encourage new forms of supply, such as build-to-rent, should therefore be high on the agenda when looking at how to tackle our housing affordability crisis. Build-to-rent has the potential to help bring more homes directly to a rapidly increasing rental market, while easing the pressures currently being felt across the housing sector. Additionally, the model would provide greater and more diverse housing options to people across all walks of life.

While the residential development industry has been busy exploring build-to-rent, with some developers seriously looking at how they can make projects work under the model, there are some key barriers that require attention before BTR can really gain traction.

In Victoria, there is opportunity for government to make changes which would encourage build-to-rent across the state, especially if the focus is on tax treatments, reducing developer charges, and looking at how local planning schemes can help accommodate the sector.

Our key decision-makers need to be careful not to introduce new policy which stifles the emergence of innovative housing supply models. Coordinated action between government and the housing industry is therefore critical as we continue to unpack the build-to-rent concept and explore alternative ways to bring greater and more diverse housing to market.


Danni Addison is the chief executive officer of the Urban Development Institute of Australia in Victoria. In her role, Danni represents the best interests of players in Australia’s urban development industry including development companies, private investors, members of the finance, planning, engineering, government and legal industries.


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 publish opinion pieces written by outside contributors representing a wide range of viewpoints. 

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