The number of renters in high-rise apartments has been increasing for the past decade with more than 10% of the population now in units.
Macquarie analysts says the high-rise apartment pipeline in key inner-city growth areas is not keeping up with demand, with about 30,000 expected to be under construction across Sydney, Melbourne and Brisbane in 2024.
While new projects are now underway, the bad news for buyers is many of them won’t be for sale.
Macquarie says a number of major property developers are expanding into the Build to Rent sector, where the properties are built specifically to be long-term rentals.
According to the Knight Frank Breaking the Shackles – the rise of BTR report, there are about 8350 dedicated BTR apartments under construction nationally as of September 2023. Forecasts predict about 55,000 BTR units will be delivered by 2030.
Macquarie says while returns to developers on this type of product are usually lower, the rentals provide an attractive long-term income stream.
Mirvac has made huge inroads into the BTR area with projects finished in Sydney and Melbourne and others underway in Melbourne and Brisbane.
It has revealed it wants to deliver more than 5000 by 2030.