The plan to make affordable homes of Melbourne’s empty, unsold apartments

An affordable housing register is being touted as a way to offload thousands of unsold, empty apartments in Melbourne, providing homes for key workers and tracking tax incentives for developers.

A Melbourne-based not-for-profit, Housing All Australians, is in talks with the federal government to launch a platform designed to attract private investment in affordable housing on a larger scale. It says the initiative has been well-received by key Labor ministers.

Robert Pradolin, left, and Dan McKenna, right, from Housing All Australians.Credit: Alex Coppel

The register would allow property owners to list available apartments at below-market rates for key workers, while also allowing governments to track developers’ commitments made in exchange for incentives.

It could also help address the surplus of unsold apartments in Melbourne – which experts say is leading to a slowdown in future housing supply – by offering people tax breaks to buy them and ensuring they then comply with obligations to rent them out affordably.

This masthead revealed that there are 8000 completed apartments in metropolitan Melbourne – or 17 per cent of units completed between 2020 and 2024 – that developers have been unable to sell.

These unsold apartments include those in suburbs earmarked for greater housing density under the state government’s activity centre proposal, raising concerns that the surplus could hinder developers from meeting ambitious housing targets.

The Allan government, however, has remained coy about whether it supports the initiative, as it continues to face pressure to provide targeted tax relief.

The organisation’s co-founder, Robert Pradolin, a former property developer, said anyone who owned housing could be on the register as long as there was a commitment to lease it at below-market rents for a period of time.

He said it could allow the Victorian government to provide and easily track concessions to developers to move the glut of unsold apartments across Melbourne.

“It’s about unlocking new forms of investment to allow affordable housing to be driven by the private sector, but providing full transparency to all levels of government in terms of the obligations that’s agreed to when the original affordable housing commitment is made by the original developer and government,” he said.

“If we collaborate with federal and state governments, we could use those concessions to unlock private sector investment.”

Pradolin said he wanted people to be able to search for properties on the register via real estate listing websites as well.

He wants the register – which is backed by Property Exchange Australia – to be up and running by next year.

He said his organisation was in talks with the federal government to roll out the register nationally and that it had been well received by the housing and treasury ministers’ offices. “We expect those talks to continue,” Pradolin said.

Independent property advisory firm Charter Keck Cramer has backed the register, which has support from across the property and community housing industry, and agreed it could be used in Victoria to help offload a glut of unsold apartments.

“It will be a central register that will streamline and help this process and [the] government would be silly not to seriously consider it,” executive director Richard Temlett said.

“It’s a very pragmatic way of actually giving transparency and governance to the mechanism that the government needs to implement.”

He said the government could offer stamp duty or other tax exemptions on the condition that the properties were placed on the register and used as affordable housing.

Economist Saul Eslake said the register would not be a silver bullet to fix the housing crisis, but would be helpful.

He thinks the register could be used effectively to track the commitments developers make to local governments in exchange for the rezoning of land and a subsequent increase in value.

“If it provides some incentive to invest A) in new housing and B) housing that is more affordable than might otherwise be built, then that’s a good thing,” he said.

Eslake said the idea of offering tax exemptions for people who buy unsold stock and lease it at below-market rates was worth considering. However, he emphasised the need to carefully evaluate the overall cost of such incentives.

He believes some of the failure to sell thousands of apartments could be due to the commercial difficulty of building apartments suitable for families with young children, at prices they can afford.

The Victorian government did not answer questions about its positions on the affordable housing register nor the impact of the glut of unsold apartments on its housing targets. It also did not comment on whether it was considering extending tax breaks.

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