Build-To-Rent Housing
Has this got the potential to address the housing shortage?
Build-to-rent housing is a new form of rental housing in Australia, where a property is held in single ownership and professionally managed. Instead of selling off individual units, developers keep the property to rent out, providing tenants with the flexibility of renting with the security of home ownership. The advantages and disadvantages of build-to-rent housing differ from the tenant’s perspective and the owner’s perspective.
Advantages from the tenant’s perspective include long-term security of tenure, professionally managed properties, good locations, and superior amenities. Additionally, build-to-rent housing could provide more housing choices and affordable options to Australians. Furthermore, it could help stabilize Australia’s volatile rental market, as it provides stability and security to tenants.
On the other hand, some experts are concerned about the accessibility of build-to-rent properties for middle- and low-income earners, as they are typically targeted toward moderate- to high-income households and rented out at market rates. Moreover, the housing type does not directly contribute to the supply of affordable housing.
Advantages from the owner’s perspective include the potential for substantial foreign investment, as build-to-rent schemes are attractive to foreign investors. Furthermore, build-to-rent could provide thousands of extra homes, which could help Australia reach its target of 1 million homes by 2029.
However, disadvantages from the owner’s perspective include the current high tax rate on foreign investors, which could be a barrier to investment. Furthermore, build-to-rent projects are predominantly high-end luxury apartments, and owners often report to investors how successful they are at charging more than the local market rent by bundling in premium features like fancy gyms and food services. Some experts question whether this is something that should be subsidized.
In summary, build-to-rent housing provides both advantages and disadvantages, depending on whether you view it from a tenant’s perspective or an owner’s perspective. While it could help stabilize Australia’s rental market and create more housing choices, it may not be accessible or affordable for all Australians, and it may not directly contribute to the supply of affordable housing.
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