Franzen Tips #1168: New Initiatives in the Property Market
Franzen Tips #1168: New Initiatives in the Property Market
Just like the famous song by Bob Dylan “The Times, they are a changing”. This week we thought we would cover a couple of new “initiatives” that we are seeing in Victoria to address various issues in the property market. And while they don’t specifically relate to NSW you can be assured that policy makers in the NSW will be watching them closely.
The first is a recent change in Victoria commencing on 1st January 2025, where more than 36,000 short-stay rentals will be hit with a 7.5% “Short Stay Levy” of the owner’s annual revenue. The revenue will go to Homes Victoria to support the organisation as it builds and maintains social and affordable housing across the state. It is estimated that approximately 29,000 of the 36,000 properties are full houses and it is hoped that many owners will convert their properties to long-term rentals which will assist in resolving the rental crisis in that state.
The second initiative is an innovative twist on the build-to-rent (BTR) trend that is gaining traction around the country. The Resimax Group will partner with Tick Homes to build 500 brand new 3 and 4-bedroom homes to the north and west of Melbourne. As part of their commitment to BTR, the group intends to retain 5-10% of all future housing stock as BTR investments. However, the interesting initiative is that the objective for their program is to house tenants in the communities and then transition them into homeowners over time. They will incorporate a rewards program that encourages tenants to set down roots in the community. Long tenancies, punctual rent payments and property maintenance will win tenants benefits such as free electricity and discounts on local restaurants.
I think we need more creative thinking like this.