Common in America and the UK, the build-to-rent property sector is starting to gain popularity in Australia as the need for affordable housing becomes increasingly important.
Its rise can be put down to an increasing focus on “affordable” housing – particularly in the context of a city’s “key workers”, a category that includes vital occupations such as police, nurses, firefighters and teachers – and on “social” housing, catering to low-income and disadvantaged people.
Build-to-rent refers to a residential development in which all the units are retained by the developer and leased out, rather than sold off.
This is quite different to the typical residential property arrangement in Australia, known as build-to-buy. Under a build-to-buy model, a developer builds houses and units to sell to individuals who either live in the dwelling or rent it out as an investment property.
Ken Morrison, chief executive of the Property Council of Australia, sees the build-to-rent trend as a positive development.
“Australia has had the ‘build-to-sell’ model for many decades, and our policy settings are based on that, but with more people renting, our cities getting bigger, and people wanting more choice in their housing options, it’s clear that there’s a demand for this type of product,” Morrison says.
“Now we have to make sure that the policy frameworks are there so that we get the supply to match that demand.”
Morrison says planning and tax incentives for developers will help facilitate a new supply of affordable housing.