Build-to-rent apartments set to spring up around city
LOS ANGELES: A housing model where all apartments in residential towers are rented out – and not sold – is taking off in Melbourne.
The so-called build-to-rent system is seen as providing residents with more amenities, greater security of tenure and better flexibility than traditional renting.
But some experts are questioning if the concept will extend to affordable housing.
While build-to-rent is relatively new to Australia, a study by Ernst & Young said that construction on about 16 towers comprising 6500 units was expected to start in Victoria in the next 12 months.
It’s tipped about 14,000 apartments across 36 projects worth almost $7bn will be developed through to 2024-25.
Leading architecture firm Bates Smart is involved in a number of build-to-rent projects in Melbourne and Sydney. Completed ones include Home Southbank at 260 City Rd, Southbank, the first purpose-built build-to-rent development in Australia.
There is also LIV Munro at 101 Therry St, which has 490 apartments, a wellness centre, co-working facilities, an outdoor cinema and entertaining areas.
Proposed projects include River Boulevard in Richmond, 50 Queens Rd in a parkland setting, and 100 Franklin St, which will have 267 units, co-working space, shops and indoor basketball court.
Bates Smart director Julian Anderson said that with housing choice limited, build-to-rent offered people a chance to create and maintain a desirable lifestyle with good access to transport, work, shopping and leisure.
“A strong sense of community is fostered within these buildings, promoting a positive and healthy environment for all types of residents, offering experiences they won’t find elsewhere,” he said. “Compared to traditional properties, build-to-rent offers a more diverse range of bookable amenity that is more consistent with a premium hotel environment.”
Mr Anderson said while typical build-to-sell properties reserved top floors for penthouses, build-to-rent developments kept them for shared amenities accessible to all residents.
Build-to-rent has been endorsed by state Treasurer Tim Pallas, who said it “can grow our stock of affordable and social housing”.
However, Rob Pradolin, founder of private sector charity Housing All Australians, said it was currently an expensive niche market, with renters paying up to $700 a week.
“People think, ‘oh, build-to-rent, that can solve our affordable housing problem’,” he said. “No it won’t, because that’s the last thing it actually is. Governments need to look at land tax concessions to encourage more development of build-to-rent, and to bring the average rent down.”