Some homes in a regional Victorian city sell for far less than similar houses nearby. The difference comes from the way the land under them is owned, not from the condition of the buildings.
The arrangement is called a college lease, and it is a legacy of the city's founding. Buyers who understand how it works can weigh the trade-offs before they make an offer.
Image: Main Street in Mildura, by 28NitroAdeDriftinCar via Wikimedia Commons, CC BY-SA 3.0.
Where the scheme survives
The city is Mildura, in Victoria's north-west, and it is the only Australian town where a college lease scheme remains, according to ABC News. No other Australian town has one. Across the city, 184 blocks of land are leased to individuals and organisations instead of being sold freehold, and the arrangement has survived for more than a century.
The scheme splits ownership in two. A buyer can own the improvements on the land, which in property terms means the buildings and anything attached to the block. The land itself stays with the state: it is officially owned by the Victorian education minister.
That split is why a college lease property can carry a price well below a freehold house nearby. The house on top can be bought and sold like any other home, but the ground under it cannot, and the price reflects that difference.
What a college lease means for a buyer
College lease properties often appear in real estate listings at prices that look like bargains. One home recently sold for a reported $300,000 on Mildura's Lemon Avenue. A similar freehold property across the road fetched almost $550,000 two months earlier.
Damian Portaro, managing director of Ray White Mildura, told ABC News that lease land exists for other purposes, but nothing like this. He described the scheme as very unique, and said he has to explain to buyers from Melbourne or Sydney exactly what it is. He said the system is 100 years old and was probably ahead of its time.
Mr Portaro said the listings appeal to first home buyers, but those buyers often run into difficulty obtaining finance because of the unusual lease clause. He said most buyers of college lease land are investors rather than owner occupiers.
The arithmetic sits behind that pattern. A buyer might get in for around half the price of a freehold home, then start factoring in the ongoing costs: council rates, insurance and the college lease itself.
Freehold means the owner holds the title to the land outright. Under a college lease, that title sits with the state, so a purchase needs to account for lease payments on top of the usual costs of owning a home. Anyone weighing the two options is comparing two different bundles of rights and costs.
Where the money goes
Revenue from the leases goes directly to schools in Sunraysia, the district around the city. The funds pay for classroom equipment and technology that schools would otherwise go without.
A Department of Education spokesperson told ABC News that the Mildura Schools Land Trust disburses about $1.95 million annually to 27 primary and secondary schools. That funding benefits more than 9,000 students across the district.
The scheme traces back to 1886, when the Victorian government signed a deal with Canadian engineers George and William Chaffey to build the Mildura irrigation settlement. Historian and former primary school principal Bob Walton said the Chaffey brothers set aside one fifteenth of available land to generate funds for an agricultural college.
That college was never built. Instead, a local high school became the first to benefit from the lease funds. Mr Walton said the Chaffey brothers were inspired by a similar scheme in California, where they were based before coming to Australia.
How the scheme is used for housing now
The lease model is finding new uses. Mallee Accommodation and Support Program has built social housing on five college lease properties, with assistance from Homes Victoria.
Charmaine Calis, the organisation's chief executive, said the arrangement produces two social goods from one block of land. It continues to support local schools, and it builds social and affordable housing on the site.
MASP told a parliamentary inquiry last year that the Victorian government should look at more ways college leases could ease the housing crisis. Ms Calis said housing supply needs to increase, and this is one way to do it.
The planning system recognises the land's special status as well. The Mildura Planning Scheme carries a dedicated clause for College Lease land, clause 11.01-1L-09. Its objective is to minimise the impact of College Lease land on urban development. Its strategies include developing the land in support of adopted strategies for the area, accounting for the constraints the leases create when calculating residential land supply, and integrating College Lease land in growth areas into future development.
What it means for the market
For buyers, a college lease changes both the entry price and the ongoing costs. The lower sticker price is real, but it comes with lease payments, rates and insurance, and finance can be harder to arrange. That mix has suited some investors and some first home buyers for decades.
The arrangement is unusual even for the regional Victorian property market, which has drawn attention in recent months. Very few blocks anywhere in the state carry this kind of split ownership, which is why agents still find themselves explaining it to newcomers.
None of this decides whether a particular house is right for a particular buyer. The scheme simply changes what is being bought: a home on land that stays in public hands, with lease payments alongside the usual costs and local schools as the long term beneficiary.
The blocks offer a rare case study in how land ownership shapes price, and the schools they support remain the reason the system endures.
Readers can explore other parts of the state through the Victoria local guide.
Works Cited
DiFabrizio, Michael, and Sarah Buchecker. "Rare Century-Old Mildura Housing Scheme Directs Lease Revenue to Local Schools." ABC News, 20 Sept. 2026, https://www.abc.net.au/news/2026-09-20/college-lease-home-owners-real-estate-mildura-victoria/106981004.
Department of Transport and Planning. "Mildura Planning Scheme: 11.01-1L-09 College Lease Land." Planning Schemes Online, State Government of Victoria, https://planning-schemes.app.planning.vic.gov.au/Mildura/ordinance/11.01. Accessed 22 Sept. 2026.
28NitroAdeDriftinCar. "Main Street in Mildura, Victoria, Australia." Wikimedia Commons, 13 Sept. 2012, https://commons.wikimedia.org/wiki/File:Main_Street_in_Mildura,_Victoria,_Australia.jpg.