Melbourne-based Resimax Group has entered the build-to-rent arena, which up until now has been dominated by well-heeled listed and international entities building high rise apartment towers.

But if property developer’s entrée into build-to-rent wasn’t enough, it also comes with a twist that promises to change the sector’s dynamics in Australia.

To combat a lull in lot sales, due in part to higher interest rates, Resimax has made the unprecedented decision to allocate 500 lots across its estates in Melbourne’s northern and western suburbs for detached housing rental stock by the end of 2025.

Australian first

This strategy marks an Australian first for the detached housing market.

It’s understood that Resimax will allocate 70% of the rental lots to projects at Mernda and Wallan, while 30% is being earmarked for the newer suburb of Eynesbury where the allocation is expected to increase over the next couple of years.

Instead of continuing the singular obsession build-to-rent developers have for upper-end apartments, Resimax stock will comprise three-bedroom (single storey) and four-bedroom (double-storey) homes – which will supply critical, family-sized rental stock in Melbourne’s north and west growth corridors.

Resimax also plans to keep between 5 and 10% housing stock in future developments as build-to-rent projects

Resimax Group-owned, Builder Tick Homes, been commissioned to construct homes specifically designed for rental purposes, and the developer plans to lease the properties direct to tenants through real-estate partner, Leap Real Estate.

We see this designated pool of rental stock as being part of the full lifecycle of our development strategy. The objective of our build-to-rent program is to house tenants in our communities, then transition them into homeowners over time.

Other developers to follow

Resimax Group CEO Aziz Kheir expects the build-to-rent scheme at Eynesbury, and other Resimax Group developments, to pave the way for all developers in Australia’s detached housing.

While the detached housing market has been slow to adopt this scheme in Australia, Kheir says changes to the group’s strategy recognise the enormous potential in the build-to-rent sector as an alternative to traditional homeownership and conventional rental properties.

“Resimax is committed to pursuing our build-to-rent development strategy, by maintaining an ongoing stake in our developments, we can maintain a unique level of control over the quality and value of stock,” said Kheir.

“We see this designated pool of rental stock as being part of the full lifecycle of our development strategy. The objective of our build-to-rent program is to house tenants in our communities, then transition them into homeowners over time.”

Broken rental market

In light of Australia’s worsening rental crisis and an increasing number of landlords found to be exiting the market, Kheir says the developer’s evolution into the build-to-rent space also offers a much-needed solution to the crisis.

By retaining a percentage of stock in its developments for rentals, Resimax plans to contribute a pool of brand new, family-sized homes within a broken rental market that desperately needs additional supply.

To put Australia’s rental crisis in context, research from the Australian Bureau of Statistics (ABS) reveals a 15% increase in the number of lifelong renters aged 25-39 years, compared with 2003.

“Continued investment and support from state and federal governments is critical for ensuring more developers pursue build-to-rent, and rental supply can grow in line with Australia’s growing population,” Kheir said.

Meanwhile, Leap Real Estate director Ken Dodds is witnessing strong interest for the scheme across Resimax Group developments with 200 tenants leasing from the developer in the past eighteen months, especially from young families who have been priced out of neighbouring suburbs.

“Adopting the build-to-rent model has allowed us, as a business, complete oversight and involvement in the value management of each rental property to ensure we maintain a competitive advantage,” Dodds said.

Image: Eynesbury is 40 minutes from the CBD in Melbourne’s booming Western growth corridor. Credit: Resimax.