NAB News

As Australia grapples with a housing crisis, two Melbourne-born businesses are working together to build a solution.

The NAB customers, commercial builder Hacer and developer Local: Residential, are constructing a build-to-rent residential project in Kensington.

The ‘build-to-rent’ model is housing built to create homes for the rental market, instead of for individual buyers. It is growing in popularity in Australia, after success in the United Kingdom, America and Canada.

NAB CEO Andrew Irvine said he was proud the bank was backing businesses to find innovative solutions to help the community.

“Simply put, housing is one of Australia’s biggest issues, and one of our biggest opportunities,” Mr Irvine said.

NAB wants to deliver $6 billion to support access to more affordable housing by 2029.

“At NAB we want to be part of the solution,” Mr Irvine said during a visit to the Kensington site to meet with Hacer and Local: Residential ahead of NAB’s 2024 Half Year Results.

Build-to-rent

NAB customer Local: Residential is the fastest growing build-to-rent business in Australia, with more than 1,300 apartments under construction in Victoria across sites in Box Hill, Kensington and South Melbourne.

Local: Residential Co-Founder and Co-CEO Matt Berg said build-to-rent offered exciting opportunities.

Local: Kensington – a taste of the future

The Kensington residential development will have six buildings comprising 477 apartments and will be home to more than 800 residents from August this year.

“At a time when housing affordability and the severity around rental increases is incredibly difficult, Kensington is a suburb with a community that is very aligned with our values,” Mr Berg said.

Fixing a broken system

Through the build-to-rent process Local: Residential is also investing in customer service.

“The existing rental market in Australia is broken. From a customer service perspective, from a leasing perspective, but also from a maintenance perspective, tenants unfortunately have become used to inferior customer service. Our onsite team will deliver these things very quickly and effectively,” Mr Berg said.

Build-to-rent also offers tenants the security of tenure, with options to sign up for a one, three or five-year lease.

Impact housing

A key focus for Local: Residential is providing impact housing which includes affordable housing, social housing and specialist disability housing.

“Affordable housing is simply key worker housing. It’s people on low to moderate incomes that have jobs that need to live close to the city and they need to do their jobs in person. For example, they might be a nurse and they need to work at a hospital. There might be a teacher who works at a school,” Mr Berg said.

Building blocks

Hacer Managing Director Vin Sammartino said the housing crisis required a unified approach amongst developers, government, and business.

“There is no really easy solution. Build-to-rent is a market Hacer has been involved in for the last four or five years since it commenced in Melbourne. We’re currently working on nine build-to-rent projects,” he said.

Mr Sammartino said the housing shortage is a very serious issue in Melbourne and Australia, more broadly.

A global movement

Local: Residential Head of Operations Jennie Fojtik said the UK build-to-rent sector offered a “proof of concept” of how successful it can be.

Ms Fotjik said build-to-rent has also helped to challenge long-held views on renting in the UK.

“People rent for a multitude of different reasons. Sometimes it’s through lack of choice or sometimes it’s through life stage, but other times it is through active choice.”

“Build-to-rent shows renting doesn’t have to be a second rate option. We can create homes for people to be proud of,” Ms Fotjik said.

“We can create a community, we can create a really positive living experience. And I absolutely believe that build-to-rent is the industry to drive that.”

NAB’s role

Local: Residential Co-Founder and Co-CEO Matt Berg said NAB’s support has been there since the business opened its doors.

“NAB did a lot of research to understand the drivers behind it, why it will succeed in the Australian market, why it’s needed but also why our particular brand of build-to-rent is something they wanted to align themselves with.”

Hacer Managing Director Vin Sammartino values NAB’s support.

For more information visit the Local: Residential or Hacer website.

For more information about how NAB is supporting solutions to affordable housing visit the NAB News website.

View NAB’s 2024 Half Year Results announcement here.