Charter Keck Cramer’s latest research counts over 18,000 Build to Rent units completed nationally, a meaningful base by any measure. But the more telling number is what sits behind it – a pipeline that, if fully delivered, would push total supply past 60,000. That is more than a tripling of stock.
By Richard Temlett, National Executive Director of Research, Charter Keck Cramer
The research tells us that Sydney leads the pipeline with 23,021 units either under construction or in planning and approval stages. Melbourne follows with 20,582, and Brisbane contributes 12,741, an increasingly credible third market, even if build costs running approximately 30% above the two southern capitals remain a headwind for feasibility.
The policy backdrop has shifted materially. The reduction of the managed investment trust withholding tax to 15%, combined with planning reforms in NSW and Victoria, has sent the correct market signals to capital.
Crucially, the federal government’s decision to carve Build to Rent out of proposed changes to negative gearing and capital gains tax arrangements stands to sharpen the sector’s relative risk profile at exactly the moment offshore capital is actively seeking stable, income-producing assets.
The demand side needs little elaboration. Rental affordability continues to deteriorate. Homeownership rates among younger cohorts are declining. The pool of long-term renters is structurally larger than it was a decade ago and growing.
What is changing, and what the data reflects, is that supply is finally beginning to respond to that demand in a more organised, institutional way.
“The question is no longer whether Build to Rent has a future in Australia, it’s whether the delivery pipeline can keep pace with the opportunity.
“If the projects currently in planning convert at a reasonable rate, we will look back at this period as the moment the sector genuinely scaled.”
Richard Temlett, National Executive Director of Research, Charter Keck Cramer
Melbourne’s position within that story is worth watching closely. Offshore institutions familiar with Build to Rent in mature markets, like the UK, the US, Japan and Korea, are running the numbers on Melbourne with increasing seriousness. The fundamentals are sound. The only variable is timing, and the pipeline data suggests that window is narrowing.
For a sector that has waited a long time for its conditions to align, the equation is finally working in its favour.
For those looking to go deeper on the data, Charter Keck Cramer will be presenting its most up-to-date research across three city events in August, Melbourne, Brisbane and Sydney. Each session will be a tailored deep dive into the Build to Rent and Build to Sell apartment market for that city.
