Melbourne’s rental supply is set to grow by almost 800 homes after the Victorian government approved two build-to-rent projects worth a combined $330 million.
Planning Minister Sonya Kilkenny signed off on a 38-storey tower in Docklands and an 11-storey complex in Fitzroy, both approved under the state’s Development Facilitation Program.
The larger project, a $257 million tower on La Trobe Street next to Marvel Stadium, will deliver 554 apartments, including 138 studios, 231 one-bedroom units, and just 96 car parking spaces.
The $72.5 million Fitzroy development on Johnston Street will add 243 homes, with nearly half (115) being studio apartments – typically the cheapest option in build-to-rent projects. Around 34 family-sized three-bedroom apartments will be included across both sites.
“Victoria is proudly the build-to-rent capital because we’ve backed this model from the start,” Ms Kilkenny said.
“We’ve approved hundreds more homes in the inner-city to give renters more choice to live close to the things that matter to them.”
Both projects come with obligations to support affordable housing.
The Fitzroy development will make a contribution to the Social Housing Growth Fund equivalent to 10 per cent of its homes being available as affordable housing.
The Docklands tower will set aside 4.6 per cent of its value above $75 million, though it’s not yet confirmed whether this will be delivered as on-site affordable units or a cash contribution to the City of Melbourne.
Community Housing Industry Association chief executive Sarah Toohey welcomed the developer contributions but called for greater transparency on how much money is flowing into the fund and which suburbs it’s coming from.
A government spokesperson said more than $25 million has been contributed under the Development Facilitation Program since it was expanded in September 2023.
Victoria’s tax incentives for build-to-rent, including halved land tax for 30 years and exemption from the Absentee Owner Surcharge, have helped Melbourne establish itself as a leader in the sector.
However, recent data from BDO Australia suggests Sydney is gaining ground. Build-to-rent approvals through to 2031 are 72 per cent higher in Sydney than Melbourne.
BDO forecasts 24,765 build-to-rent homes will be available in Melbourne by 2032, compared to 17,250 in Sydney.