What is Victoria’s Affordable Housing Rental Scheme? Everything you need to know
With rising home loan interest rates and costs of living on everyone’s mind, there may be relief on the horizon. This month, the Victorian government announced plans for an Affordable Housing Rental Scheme aimed at closing the housing gap and alleviating rental stress.
As part of their $5.3 billion Big Housing Build, the scheme will deliver an initial supply of 2,400 affordable rental homes to metropolitan Melbourne and regional city centres. Special provisions have also been included for essential workers, like nurses, police, and teachers.
This scheme represents a part of the Victorian government’s larger commitment to improving access to modern, affordable, high quality, and conveniently-located homes in Victorian cities. It will come as a welcome but sorely needed relief to the current Australian housing crisis.Let’s unpack everything you need to know about the new scheme, and how Victorians might be able to access affordable housing in the future.
RELATED: Housing value drops in Sydney and Melbourne in early 2022, says CoreLogic
How will the Victorian rental scheme work, and who is eligible
The Victorian rental scheme will allow eligible low to moderate income Victorians, especially essential workers, to apply for fixed-term rental agreements of at least 2 years. Eligible households on the Victorian Housing Register will also have the chance to apply for any relevant rental properties.
Rents in regional Victoria will be capped at median market rental prices under the program, with the same 30% income protection cap as the capital city.
The program will also encourage investors, such as superannuation funds, to make affordable rental properties available through either construction or purchase.
Properties in the program will be managed by Homes Victoria, with a target 2,400 tenancies managed by specialised rental tenancy managers.How will the Victorian rental scheme work, and who is eligible?
Who is eligible for the Victorian Affordable Housing Rental scheme?
Applicants will be required to provide proof of income that meets the thresholds listed in the table below. Rents will be set based on location/number of bedrooms. In Melbourne, rental prices will be set at least 10% below the market average of that area, with an additional protection cap set to 30% of a median household income. That way, applicants can rest assured they’d be paying more affordable prices.
Eligible income thresholds:
| Region | Single | Couple | Family |
| Melbourne | Up to $62,860 | Up to $94,300 | Up to $132,030 |
| Regional Victoria | Up to $45,820 | Up to $68,730 | Up to $96,220 |
When will the scheme start?
The Victorian government expects the first affordable rental properties to be available in regional Victoria and metropolitan Melbourne from late 2022. Specifically, they will be in:
- Ascot Vale
- Ashburton
- Heidelberg
- Greater Geelong
- Ballarat
- Bendigo.
More properties will be added to the scheme over 2023-25, with the majority available by 2025.
How do applicants apply?
Once the program is up and running, properties will be advertised online based on availability. Listings will include information about the application process and program.
For more information about the program, email affordable@homes.vic.gov.au.
Why a rental housing affordability scheme is desperately needed in Victoria
According to the Real Estate Institute of Victoria (REIV), the median sale price for a home in metropolitan Melbourne is currently a cool $1.12 million. Meanwhile, prices in regional Victoria have become piping hot, with a median surge of 27% last year alone (the highest growth rate since 2002). This prices many Victorians out of home ownership, forcing them to become renters instead.
In fact, according to the Victorian government, more Victorians than ever are renters. This especially applies to essential workers. More than a quarter of surveyed households in the private rental market put more than 30% of their income towards paying rent; this is one of the key indicators of rental stress.
Economic disruptions due to the pandemic and successive lockdowns have further pushed up housing related costs, making affordable housing one of the most urgent issues in Victoria (and greater Australia) this year. The new scheme aims to reduce rental stress by improving access to affordable housing for Victorians.
RELATED: How big was the property boom? Australian house prices soar to record heights
Keen for more affordable housing news? Check out our family finances hub.
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Unloan Variable
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Go to site- Interest rate
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- Comparison rate
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5.90
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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
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