The Property Council of Australia has called upon the next NSW Government to increase its focus on Build to Rent housing amid continued rental vacancy lows.
Sydney city’s rental vacancy is now at 1.7%. Because of this, Adina Cirson, Acting Executive Director at Property Council New South Wales (NSW) said urgent action was needed.
“As migration and population growth push demand well ahead of housing supply, the existing shortfall of diverse rental dwellings will only get worse. Asset classes like Build to Rent have a significant role to play in the broader housing mix, with the potential to create a more stable housing pipeline that is counter-cyclical and does not rely on presales. Institutionally backed Build to Rent could comprise around 5% of the residential rental pool within a decade – delivering more than 175,000 dwellings across the country, but right now Build to Rent faces significant regulatory, planning and taxation barriers in NSW. With the right incentives in place, Build to Rent could provide an opportunity for government to partner with the private sector to deliver discount-to-market affordable rental houses for essential workers.”
Adina Cirson, Acting Executive Director, Property Council NSW
Adina, on behalf of Property Council of Australia, has advised that the NSW Government should replicate the Queensland Government’s Build to Rent Pilot Project.
“Under the model, the NSW Government would provide a targeted rental subsidy to deliver affordable and market rental housing within Build to Rent developments in NSW. Governments could support developments on privately owned land at the cost and risk of the successful proponent and allow for an expression of interest process for Build to Rent developments on state-owned land.
“Under the program, a set percentage of dwellings can be provided at discounted rentals via the subsidy, which helps to better align the interest of government and developers and meet the growing demand for secure long-term rental properties. Alongside this pilot project, the NSW Government should improve tax concessions for Build to Rent to meet the changing trends across Sydney’s housing market, including exclusion of Build to Rent projects from the Strata Bonds Scheme.
“While we welcome the NSW Government’s efforts to date, including the move to fast-track Build to Rent through the planning system, introduce a 50 per cent land tax discount, and removing foreign taxes for eligible Build to Rent projects for the next 20 years, these endeavours have not unlocked the full potential of this asset class. As was recently revealed, only one Build to Rent project has received planning consent in the last two years since the NSW Government introduced the new planning pathway for Build to Rent developments. We need to match intent with action if we’re going to truly tackle the rental affordability crisis in this state.”
Adina Cirson, Acting Executive Director, Property Council NSW
Whilst addressing and recognising that some progress has been made, more needs to be done to mitigate the effects of the low period.
