New South Wales Treasurer Dominic Perrottet has announced the establishment of a working group to assess the viability of establishing a ‘build-to-rent’ asset class in NSW.
During a Property Council event, the Treasurer highlighted the potential importance of the sector in addressing the housing affordability challenge in NSW and acknowledged the range of policy issues that would need to be addressed to make it reality at both the state and federal levels.
"The 'build-to-rent' industry known overseas as the 'multi-family' or 'private rental' sector involves institutional groups building masses of apartments to lease on a long-term basis, sometimes indefinitely. A single corporate landlord manages all leases and amenities," the Australian Financial Review said.
Build-to-rent programs have had success in the UK, Germany and the US. In America, build-to-rent is the largest real estate class and generates more than $215 billion in revenue a year.
“The Treasurer’s announcement is a major step forward to creating a viable market for build-to-rent in NSW,” Property Council NSW Executive Director Jane Fitzgerald said.
“With Property NSW being tasked to undertake preliminary work to explore the potential for a new sector the Property Council looks forward to working hand-in-hand with the Government.
“Build-to-rent is a sector that has strongly developed overseas and there is no reason that with the right policy, planning and tax settings, the sector cannot develop here in NSW.
“Creating a sustainable, affordable housing market in NSW means providing a diverse range of housing options and build to rent could be a viable choice to provide certainty and security of tenure to people who want to rent rather than buy.
Mirvac recently announced its intentions to deliver the
first major build-to-rent apartment development to market with the backing of major superannuation funds in an attempt to tackle housing affordability issues, according to a report in The Australian which revealed Mirvac had a potential site in Sydney where they would build and hold units in capital cities supported by major superannuation funds that get returns from rentals paid by residents.