Travis Fein’s St Kilda Junction house has one of the seductive views of Melbourne that cash can purchase.
On an higher flooring in certainly one of St Kilda’s tallest towers, his unit’s floor-to-ceiling home windows give an uninterrupted view of the patchwork of open areas round Albert Park Lake, Center Park’s multimillion-dollar cottages far under and the curved shoreline of Port Phillip Bay past.
However Fein didn’t purchase the view; he leased it.
The 28-year-old property investor and social media id bought his house and moved right into a two-bedroom pad in Seashore Home, a 297-unit build-to-rent growth that towers over St Kilda’s northern gateway.
Fein pays $1275 every week for his luxe house, just about double St Kilda’s $650 median worth for a two-bedroom unit.
“However for context on that – as a result of that’s an enormous quantity – it’s a wonderful house,” he says. “I’ve Albert Park views, seaside views, metropolis views, so it’s one of many top-tier residences.”
Constructed by Melbourne developer Gurner Group for $300 million, Seashore Home payments itself as a spot to “stay like a millionaire, mortgage free”.
Its facilities wouldn’t be misplaced on a cruise ship: a heated pool lined with banana lounges, dimly lit billiards room, 10-pin bowling alley, cinema, plush personal bar with metropolis views, day spa, pet spa.
The opulent complicated is a part of Melbourne’s first wave of build-to-rent developments, inner-city buildings marketed at lifestyle-conscious renters blissful to pay over the percentages for a central pad with perks.
“To have the ability to simply use a sauna, ice bathtub and the entire wellness space after which go residence to sleep, you’d have to spend $30,000 to $40,000 to have that at residence privately,” Fein says. “You’re not paying for a traditional rental. You’re paying for a pleasant way of life, which might price a shit-ton of cash in any other case.”
Footloose, financially flush and renting as a result of he needs to, Fein could possibly be a poster youngster for Melbourne’s burgeoning build-to-rent housing market, which has burst out of the bottom and into the town’s skyline with a promise to make renting concurrently extra glamorous and safer.
Governments determined for options to the housing disaster have laid out the welcome mat for a few of Australia’s largest builders, together with Lendlease, Mirvac, Grocon and Salta, together with operators from the US, Japan and Singapore.
However some specialists say the inflow of high-priced housing is doing nothing to ease Melbourne’s rental affordability disaster.
An evaluation by The Age of 12 months of rental knowledge from tons of of listings at 14 accomplished build-to-rent developments bears out this criticism: they’re 20 to 70 per cent dearer on common than different close by rental properties.
In the meantime, some tenants interviewed for this story have stated the expertise doesn’t stay as much as the glamorous gross sales pitch, or justify the high-end rents.
Construct-to-rent isn’t mainstream housing. It’s pitched at a choose cohort with cash to spare.
However the mannequin is muscling in on Melbourne’s struggling house sector so quickly that some property analysts predict it would quickly develop to be a serious participant within the rental market.
One set of numbers, calculated by property advisory agency Constitution Keck Cramer, captures the seismic shift below manner.
In 2021, an estimated 14,000 new residences had been in-built Melbourne. Not one was a build-to-rent unit.
Within the 12 months to July 2026, an estimated 8200 new residences had been in-built Melbourne. Greater than half of them, 4400, had been build-to-rent.
It’s the primary time the incipient housing mannequin has overtaken the supply of typical (or build-to-sell) residences in Melbourne, or some other Australian metropolis.
Construct-to-rent towers have sprung up round Docklands, South Melbourne and Southbank, close to prepare stations and tram strains in Kensington and Brunswick, and alongside the town’s hippest excessive streets in Fitzroy and Collingwood.
A number of thousand extra are within the pipeline, funded by a mixture of home and overseas institutional capital that’s swooping in to reap the benefits of federal and state tax breaks and pleasant planning legal guidelines aimed toward buoying funding in build-to-rent (BTR) housing.
Initiatives that had beforehand stalled are being revived and repurposed as build-to-rent: Southbank’s STHBNK, conceived and bought off-the-plan as Australia’s tallest house constructing, had been altered final month to a smaller build-to-rent tower.
Plans for a 39-storey CBD workplace tower on Lonsdale Avenue had been additionally dumped in August in favour of build-to-rent. A number of BTR high-rises have simply been authorized round Arden underground station.
It’s a outstanding rise for a sector that hardly existed in Australia 5 years in the past.
However housing analysts warn the increase is a symptom of a dysfunctional housing market by which the annual variety of new residences being in-built Melbourne has shrunk to lows final seen within the international monetary disaster, whereas the town absorbs properly over 100,000 new residents every year.
“I keep in mind the great previous days in 2016 and 2017, once we did 19,000 [new apartments a year]; that’s actually the extent that we needs to be constructing to convey Melbourne again into steadiness,” Constitution Keck Cramer nationwide govt director Richard Temlett says.
“Folks nonetheless want a spot to stay, and much more of them are simply being pressured to lease.”
The rise of the lifelong renter
“We drive to a home in Preston
We see police arresting
A person together with his hand in a bag
How’s that for first impressions?
This place appears miserable
It’s a California bungalow in a cul-de-sac.”
Melbourne singer-songwriter Courtney Barnett’s 2015 tune Depreston was a forlorn indie anthem for a technology who believed ever-escalating property costs – up greater than 400 per cent in Melbourne since 2000 – had denied them the Australian dream.
Renting has traditionally been a transitional type of housing for many Australians, Dr Tom Alves, performing managing director of the Australian Housing and City Analysis Institute, says. However within the twenty first century, a rising cohort of lifelong renters has emerged.
That is significantly so amongst youthful adults. In two generations, Australians aged 25 to 34 have modified from principally residence homeowners to principally renters. Possession charges have additionally fallen under 50 per cent amongst low-income Australians aged over 45.
“There clearly all the time had been a bunch of people that had been renting for his or her entire lives, however that was a small group, whereas now it’s grow to be pretty mainstream and never essentially by alternative,” Alves says.
Australia’s steadily declining residence possession charge has “ready the bottom” for the current increase in BTR housing, Alves says. As residence possession falls out of attain for extra folks, it gives these on good incomes a chance to lease a mode of housing they might not afford to purchase.
The brand new wave of BTR lodging, overwhelmingly leased at a premium, has additionally emerged at a time when rental affordability is the worst on document, in response to federal authorities advisory physique, the Nationwide Housing Provide and Affordability Council.
An evaluation by The Age of 1223 listings in 14 operational BTR developments, between July 2025 and June 2026, discovered that median rental charges in these buildings are 20 per cent to 70 per cent dearer than different residences in the identical suburb.
Seashore Home, in St Kilda, listed its items at 66 to 70 per cent above St Kilda’s median. Realm in Caulfield North is equally high-priced, leasing a few of its one-bedroom residences for greater than double the suburb’s $455 weekly median.
Even Native, an operator that has sought to distinguish itself as a uncommon supplier of reasonably priced build-to-rent lodging, listed items in Kensington at 37 to 48 per cent above median for the suburb.
Just one growth, Spotswood’s Union Quarter, supplied rental lodging in step with the suburb’s median.
“What’s this doing by way of affordability? I believe little or no is the reply. If something,” Alves says.
Victoria’s Planning Minister Sonya Kilkenny visited Preston in late April to formally launch the maiden Melbourne house constructing for BTR model, WeAreLiving.
Standing on a Sixteenth-storey rooftop BBQ space with a view of the CBD skyline behind her, Kilkenny gushed concerning the constructing to an viewers of property and superannuation stakeholders being served finger sandwiches, Portuguese tarts and developer-branded cans of carbonated water.
“What a wonderful constructing it’s. The daring purple brick as you enter downstairs, I need to say it’s certainly one of my favourites,” Kilkenny instructed the group earlier than serving to to chop the ceremonial ribbon.
“That is precisely the kind of growth we need to see: nice properties, well-built, safe, in fabulous places, providing alternative and variety.”
Melbourne’s worsening housing affordability problem “can solely be met by boosting provide”, Kilkenny stated, earlier than itemizing the planning and tax adjustments she has steered by means of parliament to stimulate housing growth.
“We’re additionally, after all, actually proud to be the nation-leading build-to-rent capital, and we’re going to proceed to help build-to-rent developments with 50 per cent discount on land tax and, after all, the exemption from absentee surcharge.”
The absentee land tax surcharge is blamed by the property business for driving overseas buyers away from Melbourne’s house market. BTR buildings are exempt.
WeAreLiving ticks all of the high-amenity bins of Melbourne’s BTR increase. The constructing’s good-looking purple brick floor flooring and basement ranges embrace a fitness center, sauna, steam room and chilly plunge pool, and a bookable eating room.
The constructing provides a splash of fashion to the cluster of gray high-rise house buildings which were wedged into the slim triangle of land between gentrifying Excessive Avenue and the route 86 tram hall on Loads Street.
Rental items vary from $545 every week for a studio house to $1390 for a three-bedroom townhouse, placing the event on the high quality for Preston.
The constructing doesn’t embrace any reasonably priced housing.
This omission was a calculated choice. To take action would jeopardise the returns of the 1.2 million Conscious Tremendous members who’ve financed the undertaking, certainly one of its builders stated.
“Our beginning place right here was a return for Conscious and return for his or her members,” Barings Actual Property Head of Residential Warwick Dowler stated. “So, from our perspective, that’s primary. To hit that minimal return hurdle right here it needed to be market lease.”
The undertaking was financed with the help of a 50 per cent concession on land tax.
The federal government has established a four-month, accelerated approvals timeline for initiatives that embrace no less than 10 per cent reasonably priced housing. However Dowler stated this inducement would do little to sort out the extent of unmet want for lower-cost rental housing.
“Fairly actually … if [the government] need to see extra reasonably priced product, they want to have a look at subsidy packages,” he stated.
Not rooster feed
Monday afternoon is Sasha Sheko’s rostered time to feed and water the 4 resident hens at 15 Thompson Avenue, a 197-room build-to-rent growth run by Assemble in Kensington.
“I’m so inner-north I’m blanching kale stems to take to my chickens,” Sheko says.
Sheko moved right into a two-bedroom house in Thompson Avenue final yr, saying a wistful goodbye to their previous CBD house, the place they paid a non-public landlord bargain-basement lease of $440 every week.
The brand new residence isn’t any greater however is extra fashionable and has communal facilities: together with a typical room the place new friendships have been made, and a rooftop basketball court docket they virtually by no means use. It prices $605 every week.
Sheko says it’s respectable worth for the world, though they’ve been so underwhelmed by the usual of upkeep that they count on to maneuver out inside a yr.
“Simply the entire Assemble mannequin, ‘we’re moral, we’re sustainable, blah blah blah’, I believe it perhaps raised my expectations by way of what it might be like coping with property administration.
“I’m on the level the place if I’ve any extra points I’ll ignore them and doubtless received’t be there in six months, which is a disgrace as a result of the neighborhood is basically pretty.”
Assemble is positioned on the reasonably priced finish of the build-to-rent market, with fewer facilities than most different BTR builders provide. It has additionally purchased closely into federal and state authorities schemes to ship subsidised reasonably priced housing.
Even so, Sheko’s weekly lease is dearer than the $550 weekly median worth for a two-bedder in Kensington.
College of Melbourne Professor of Property Piyush Tiwari has researched Melbourne’s first wave of BTR developments, and says the monetary feasibility of the sector “hinges on the power of items to be leased at larger than market rents”.
Communal facilities corresponding to wellness rooms, swimming swimming pools, gyms and cinemas have been included to draw tenants keen to pay the steeper rents essential to make a revenue.
“The unique proposition was that BTR offers the next finish rental providing, together with facilities, so the rents could be larger,” Tiwari says.
“Typically, the suppliers had been anticipating a lease to be 20 to 25 per cent above the market.”
Construct-to-rent housing is mainstream in components of Europe and within the US, the place it accounts for roughly 4 per cent of the housing market, and caters extra for lifelong renting households.
Tiwari says that if Australia follows these nations, mid-market build-to-rent housing will emerge. However two years after his analysis paper was printed, most BTR buildings in Melbourne are much more costly than the 20 to 25 per cent premium the primary wave was financed on.
The Age calculated rental charges for Melbourne’s BTR developments utilizing Homer, a property app that tracks the costs over time of all Australian properties available on the market.
Homer chief govt Henry Pedersen had private expertise with Melbourne’s premium-priced BTR sector whereas searching for a rental residence for his household of three in 2024.
Pedersen and his spouse thought of leasing a three-bedroom house at Residence in Richmond, however baulked once they discovered a contemporary four-bedroom townhouse in the identical suburb for $250 every week much less.
“The facilities of these issues are actually cool and that considerably inflates the worth, however on the similar time I didn’t suppose it was value that a lot of a distinction in worth personally; perhaps if cash was a bit looser,” Pedersen stated.
He suspects many renters, aspiring to personal a house at some point, would make the identical calculation.
“Paying 10 to twenty per cent extra doesn’t assist you save to enter the property market.”
Edward McAuliffe is director of BTR operations at Salta, which operates Fitzroy and Co, a boutique BTR in Fitzroy North, and has two giant initiatives in growth in Richmond and Docklands.
Median rental charges at Fitzroy and Co exceed the median rental in Fitzroy North by about 50 per cent, The Age and Homer’s evaluation discovered.
McAuliffe agreed that almost all BTR housing in Melbourne is comparatively costly to lease, however stated that was the one option to make the developments stack up financially.
“You understand, we’re creating housing,” he stated. “Sure, a few of it’s on the premium finish in the mean time, however that’s a operate of what it’s essential to do to get a undertaking to grow to be viable, get the funding it’s essential to construct it and get it working.”
‘It felt like a scholar campus’
The place youthful renters have baulked at BTR, some operators have turned to worldwide college students to fill their new buildings, satisfying their financiers however undermining the premium rental expertise.
The primary few months dwelling in Mirvac’s LIV Aston constructing in Docklands had been nice for David Powlett. The house was snug, the neighbours had been pleasant and the tackle on the Yarra’s north financial institution was handy.
The lease was excessive in comparison with different locations he’d thought of, however the single father and IT service designer wanted a spacious and well-built house for himself and his two kids, and was ready to pay a premium for it.
“I used to be a bit fussy about cabinets that don’t open and noise ranges and issues like that, and the Mirvac house was truly very quiet, very snug, the construct high quality was very excessive,” he says of the three-bedroom unit he rented, initially for $1270 every week.
Powlett was one of many constructing’s first tenants.
“I used to be virtually the one individual on my flooring,” he says. Even so, the small neighborhood of residents had been socially lubricated by common, catered gatherings thrown by administration in one of many constructing’s frequent areas.
However six months in, the neighborhood in LIV Aston modified dramatically as scores of vacant items had been full of worldwide college students, seemingly inside a matter of days.
“It actually modified the entire ambiance … I do know fairly a couple of folks left as a result of they felt the vibe had modified a bit an excessive amount of. It simply didn’t really feel like premium lodging, it felt like a scholar campus,” Powlett says.
Facilities such because the constructing’s cinema room, media room and eating areas had been booked out, generally for months.
“We didn’t use the facilities wherever close to as a lot as we thought we might … Folks simply had them continuously booked, so it was only a nightmare to attempt to get in there,” Powlett says.
He stayed till the tip of his 12-month lease, however left when the corporate sought to extend his lease by greater than $300 every week.
On the opposite aspect of the CBD, in Mirvac’s LIV Munro constructing, Alaisdair Leith’s expertise was virtually the identical: an opulent way of life in a close to empty constructing soured after the constructing quickly crammed up with abroad college students.
Leith and his associate moved right into a two-bedroom house dealing with Queen Victoria Market simply three months after it had opened, paying $700 every week.
“The primary six months there was unimaginable; no points,” Leith says. “There was a very good mix of tenants; folks of their 30s, retirees.”
However the constructing was clearly properly under capability till it was full of worldwide college students, main Leith to query the worth in his premium lodging.
“It was close to not possible to guide something as a result of they might guide six months prematurely. So it was like, properly, I can’t use the facilities. So why am I paying this?”
They moved out earlier this yr.
Melbourne College’s Tiwari says that worldwide college students are a straightforward marketplace for BTR operators to faucet.
However he says the actual fact they’re doing so can be a sign that one of many key promoting factors for the BTR sector – the provide of long-term, multi-year leases as an alternative of ordinary, 12-month leases – is attracting comparatively few takers.
A Mirvac spokesperson stated its BTR buildings appeal to completely different resident profiles relying on location, with some drawing in additional college students, others interesting to professionals, households, key employees or downsizers.
Mirvac is pursuing authorized motion towards Victoria’s valuer-general within the planning tribunal, arguing that LIV Munro’s land worth for tax functions needs to be slashed by greater than $32 million, resulting from “the deterioration in property market situations and financial uncertainty over the previous 12 months”.
However its 2026 annual report, printed in August, presents a extra bullish place about its build-to-rent development technique, telling buyers that Australia’s housing crunch is fertile floor.
Low housing provide, traditionally low rental emptiness, elevated migration and inhabitants development, all help the corporate’s BTR enlargement technique, the report famous.
Constitution Keck Cramer’s Temlett says the BTR increase is delivering desperately wanted housing for Melbourne at a time when far too few typical house developments are being constructed.
“We’ve bought the quickest rising inhabitants apart from WA, we’ve bought a persistent scarcity of rental inventory, so that every one factors to the truth that rents will proceed to rise.”
However in chasing the higher tiers of the market, Melbourne’s BTR increase has left the renters most in want of an reasonably priced place to stay out within the chilly, Tiwari says.
“On the finish of the day, millennials are funds acutely aware, and their experiences are very completely different. They aren’t essentially searching for all these facilities, they’re searching for a good residence.”
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