Build-to-rent may be a fast route to increasing much-needed rental accommodation in Australia, but existing policy settings are not supportive, according to a new report.
For Australian cities to remain some of the world's most liveable, a report by commercial law firm Allens in conjunction with Urbis says that an increase supply in housing is required.
“But while build-to-rent is gaining traction, it’s still trying to prove its viability,” Allens managing associate Tim Chislett said.
Almost 1.6 million homes are needed to house Australia’s growing population according to ABS dwelling projections, equating to an additional 500,000 rental properties over the next 10 years, the report shows.
“Build-to-rent supporters aren't necessarily asking governments for more favourable concessions than other asset classes; they're simply seeking a level playing field,” Chislett said.
Currently no Australian jurisdiction has “specifically defined” what a build-to-rent asset is, falling instead under the general residential accommodation sector.
The report highlights three areas where changes to government policies are needed, to support the burgeoning sector—managed investment trusts (MITs), land tax and planning.
Allens advised Mirvac on the acquisition of the $333.5 million purpose-built, build-to-rent project, the Munro, in Melbourne's CBD. Melbourne-based developer PDG is developing the 490-unit residential tower for Mirvac, under the agreement.
While the ASX-listed group's first build-to-rent asset, at Sydney Olympic Park, is due to complete in September next year.
“It's no longer about owning a house,” Allens partner Michael Graves said.
“There's a need for accommodation that's close to work, offers high quality amenities and guarantees security of tenure.”
Across the country, the New South Wales government last year said it would commit a parcel of land in Sydney’s inner suburb Redfern, at 600- 660 Elizabeth Street, for build-to-rent under its Communities Plus program.
And in Queensland, the former Commonwealth Games athletes village was transformed into a BTR project comprising 1251 apartments, opening earlier this year on the Gold Coast.