Advocacy has been a tremendous example of the property industry coming together to ensure the right settings are in place for Build to Rent, which is still new to the Australian market.
This, and the resultant reforms, are expected to lead to continued investment and growth in the Australian Build to Rent market, which is critical for key cities given the expected population growth and already historically tight rental vacancy rates.
Allens and Urbis are proud to be a part of this advocacy as they continue to call for action to ensure the sector can realise its full potential to create more liveable cities, drive economic growth, and play a key role in alleviating the ongoing housing crisis.
However, policies such as the previously proposed caps on rent may hold the sector back. According to both companies, not only will it possibly hinder Build to Rent’s potential, but it will also cause supply shortage (and, consequently, increase rents even more in the long term) at a time when we need solutions, not more problems.
The role Build to Rent will play
Over the next four years, the population of the eastern seaboard is set to increase by 1,500,000 (more than the size of Adelaide) as a result of net overseas migration.
Allens and Urbis state that Build to Rent has moved from a ‘nice-to-have’ market that could fill a demand for premium rentals, to a ‘must-have’ product that’s critical to alleviating Australia’s housing crisis and ensuring the future liveability of our cities.
Growing pipeline
Build to Rent has been proven to be one of the levers that can assist with this population growth. The national pipeline has picked up pace in the first half of 2023 to reach a cumulative total of 45,000 units, which is anticipated to equate to approximately $16bn in investment in new rental housing supply.
To date, Melbourne has attracted about half of this pipeline investment. As the fastest growing and soon-to-be largest city in Australia (by population), increasing housing supply here makes sense.
However, the housing supply issue is a national problem. Allens and Urbis stipulate that Australia needs to ensure that the right policies to encourage more supply across the country are in place so that each city has a growing Build to Rent pipeline.
