Build-to-rent (BTR) residents doubt changes to investor tax concessions will boost rental housing supply, as tenants brace for future rental rises.
Tax cut changes were announced in the 2025 federal budget, expected to drive construction of 80,000 dwellings in the next decade including 8,000 affordable homes.
Melbourne dominates Australia’s BTR sector, with more than 73% of the nation’s stock as of mid-2024, according to Victorian government data.
The institutional investor-owned and operated housing model promises long-term tenancy.
However, despite federal optimism, BTR rents in Melbourne are up to 26% higher than equivalent non-BTR market prices according to an Australian Financial Review article published last September.
Last year CoreLogic property analysts put Melbourne’s median average rent at $589.

Livinia Scritchley, a renter in her 20s, left LIV Munro in Melbourne CBD — one of Melbourne’s first BTR buildings — for a more affordable two-bedroom townhouse in Richmond in 2024.
She said she believed premium finishes were driving up costs.
“When you are young, you don’t really care about the finishes of the countertops,” Ms Scritchley said.
“(Developers should) use things that are a little bit cheaper, bring down the price of the apartments.”
She found the rent for her furnished studio “in the high 600s” unsustainable given its size.
Ms Scritchley said many of her friends had not heard of BTR, and those who had believed it was outside their salary range.
Wayne Noble, another renter at LIV Munro in his mid-50s, also has concerns. He said private companies running BTR projects prioritised profits over affordability, and he couldn’t see how rental price hikes could be curbed.
“I don’t think you could do it [ease housing pressure] with private companies…[they] obviously want to fill it and get as much money as they can,” he said.
Initially attracted to the convenience of BTR, Mr Noble said he now faced a 25% year-on-year rent increase.
Both renters noted a growing number of apartments being rented to expats and international students.
Ms Scritchley said the model appealed to this group because many could afford rent “through the bank of mum and dad”.
However, others do see potential in the model.
Michael Cotter, a community manager who has worked at several BTR developments, said that while current rents were high, affordability would improve with time.
Mr Cotter said that most of the BTR projects were in a higher bracket for “branding purposes” and, once the model was proven to investors, it would be a “much bigger solution to the housing affordability challenge”.
He pointed out that many BTR complexes also had provisions for affordable housing.

BTR is a relatively new concept in Australia that started gaining traction in the mid-2010s, following examples from overseas markets such as the US, UK and Europe.
While the long-term impact of BTR in some markets remains unclear, in the US and UK it has created a rental sub-category that offers tenants more choices, according to submissions by the Property Council of Australia.
The sector remains small compared to traditional rental markets, and affordability continues to be a challenge.
In an interview with ABC News in October 2024, Richard Valentine-Selsey, head of European living research at Savills noted that “build-to-rent projects are being delivered faster and providing more long-term leases” in the UK.
Still, he had doubts about the model’s ability to help keep rents low in that market.
Like overseas markets, BTR in Australia promises centralised management and long-term leases.
According to a realestate.com.au report, BTR may help local renters with private landlords break from inflexible leases and no-fault evictions.
Melbourne’s BTR complexes are mostly in prime inner-city areas with higher land and construction costs. Their onsite amenities include gyms, co-working spaces, and on-site concierge services, further increasing costs borne by tenants.
Victoria’s capital city became the hub of the BTR movement when its state government announced land tax concessions in 2020 to encourage the sector’s growth.
According to the State Revenue Office, under the BTR benefits scheme, eligible BTR developers can receive a 50% discount on the taxable land value for up to 30 years. Additionally, they are exempt from any absentee owner surcharge throughout that period.
The opposition has criticised the government for granting unnecessary tax incentives to developers.
When Labor introduced the BTR federal tax concessions in mid-2024, former Greens housing spokesperson Max Chandler-Mather told ABC News they were “tax handouts to developers and investment funds to build what will be unaffordable apartments”.