Victoria approves almost 800 build-to-rent homes in Melbourne
In response to Melbourne’s ongoing rental housing shortage and low vacancy rates, the Victorian Government has approved the construction of nearly 800 new Build-to-Rent (BTR) homes in Docklands and Fitzroy.
Victorian Minister for Planning Sonya Kilkenny approved two residential development projects in inner Melbourne, both located close to public transport, employment hubs, shops, and essential services. The projects include:
- 554 homes on La Trobe Street, Docklands
- 243 homes at 159–167 Johnston Street, Fitzroy
According to the Australian Housing and Urban Research Institute (AHURI), Build-to-Rent refers to multi-unit residential developments that are constructed and retained by developers or institutional investors specifically for long-term rental purposes, rather than being sold as individual apartments.
The BTR model is already well established in countries such as the UK and the US. In recent years, it has gained increasing support from Australian governments as part of efforts to address housing supply challenges. The Victorian Government considers the model an important strategy for increasing rental housing availability and has positioned Victoria as a leading state for BTR development.
Under current Victorian policy, eligible BTR developments completed and operating between January 2022 and December 2031 may receive a 50% land tax concession for up to 30 years, along with a full exemption from the Absentee Owner Surcharge.
Domain Rental Report reported that Melbourne’s rental vacancy rate fell to 1.0% in March 2026, the lowest level recorded in almost two years, highlighting the continuing pressure on rental supply.
The Victorian Government stated that the Development Facilitation Program is designed to speed up project approvals and accelerate housing construction.
However, AHURI noted in its newly released 2027 NHRP Research Agenda that many Build-to-Rent developments currently target higher-income renters and are often positioned as premium housing products. The institute suggested that governments should also consider how to ensure long-term housing affordability within the sector.
While the newly approved projects are expected to increase the supply of rental housing in Melbourne, their broader impact on housing affordability will depend on future pricing, accessibility, and long-term management arrangements.
