According to the latest report from Cushman and Wakefield, the Australian Build to Rent sector is set to mimic that of the UK’s. By 2030, Build to Rent is expected to have emerged as a critical part of the housing supply mix.
The acceleration in development that has occurred in 2023 mirrors the beginning of the expansion phase that occurred in the UK from 2015 onwards.
Over the following eight years to 2023, total UK stock has expanded from 11,312 to 82,636 apartments, reflecting an average growth in the total stock of Build to Rent apartments of 30% per year, or 9,450 apartments.
Based on the current pipeline of Build to Rent developments in Australia and the demonstrated growth trajectory in the UK, by 2030, the report forecasts that around 55,000 dedicated Build to Rent apartments will have been completed.
This would imply an annual delivery of 5,900 apartments as supply accelerates from 2024 onwards, slower than the UK in terms of annual unit delivery but a similarly rapid expansion in proportionate terms, Cushman & Wakefield found.
Over the past decade, Build to Rent has proven to be a success in the UK and expanded rapidly to become a significant and fast-growing part of the residential market.
Like the UK market, momentum around Build to Rent slowly grew, with the commissioning of a government review of the barriers to institutional investment in private rented homes in 2012.
Acting as a catalyst for changes in planning policy, The Montague Review saw the release of more land for development and ultimately the emergence of Build to Rent as a distinct asset class.
Since 2015, the total stock of Build to Rent apartments has expanded to 83,000 apartments, with the current development pipeline pointing to a further acceleration in development activity in 2024-25.
From a standing start, Build to Rent supply now accounts for 1.5% of the total rental market, with the expectation that this proportion will continue to increase rapidly as the sector matures.
London has been a natural focal point for Build to Rent developments, with 38,000 apartments in the capital representing 46% of total stock, but Build to Rent has established a foothold in all major cities including Manchester, Birmingham, Leeds, Liverpool and Bristol.
Build to Rent schemes have generally been very well-received by tenants, as evidenced by very low vacancy across the sector and short timeframes to fully lease new schemes.
Survey evidence consistently finds that tenants rate the Build to Rent experience more highly than the wider rental market.
