The Property Council of Australia wasted no time in welcoming the NSW Government’s package of measures to help provide more and better housing choices for people who rent, by boosting the growth of the ‘build-to-rent’ sector.

“The incentives announced today will help to attract institutional investment into new housing, giving the one-third of Australian households who rent their home more choice, certainty and better amenity,” said the Property Council’s Chief Executive, Ken Morrison. 

At a Glance:

• Build-to-rent improves the resident experience, can offer longer-term tenure, provides professional lease and facility management
• NSW Government's decision to cut land tax on BTR developments by 50 per cent will be welcomed by investors and developers
• Mirvac has recently completed one of the first large-scale build-to- rent projects at Olympic Park in Sydney

“Build-to-rent improves the resident experience, can offer longer-term tenure, provides professional lease and facility management, while adding to the spectrum of rental housing options,” Mr Morrison said.

“This announcement is a very welcome shot in the arm for new housing construction and will support jobs and investment as we rebuild and recover from the impact of COVID-19.

“Build-to-rent has flourished overseas and it’s great to see the NSW Government taking the steps necessary to support the growth of the sector locally by providing a clearer pathway for investors and removing tax disincentives which have held back the sector’s potential."

The Property Council has been a strong advocate for build-to-rent housing for its ability to provide more privately funded housing units and affordable rental housing if the right incentives are put in place, as well as provide better amenities for tenants and support new housing construction.

Ben Martin-Henry, CBRE’s Head of Build to Rent Research said the NSW Government's decision to cut land tax on BTR developments by 50 per cent will be welcomed by investors and developers alike given that land tax can account for 15-25 per cent of overall BTR operating expenses.

"This will be a real boost for the fledgling sector at a time when more Australians will have to consider the prospect of long-term renting," said Mr Martin-Henry.

"We have seen examples overseas that when the government gets behind the sector there is a significant momentum shift, so we expect to see more projects announced over the coming months.

"The new planning policies covering design aspects and sustainability are also an important step forward in ensuring that developments meet certain environmental standards and developers will be building for a more sustainable future.”

Build-to-rent has proven to be a successful model in the US and UK but remains in its infancy in Australia.

Mirvac has recently completed one of the first large-scale build-to- rent projects at Olympic Park in Sydney.

‘With this package of investment incentives and the right planning framework, NSW is poised to lead the nation in the development of this new type of housing to deliver better outcomes for people who rent as well as support new housing construction,” said Mr Morrison.

CBRE's Puian Mollaian, Associate Director of Structured Transactions & Advisory Services said the move will provide much needed stimulus and will help attract investment capital, which is highly mobile across borders and would otherwise find a home elsewhere.

"CBRE is working with major developers and institutions on live mandates and these changes will increase the prospects of bringing offshore investment into Australia’s BTR sector, boosting the economy and supporting employment growth," said Mr Mollaian.

"We also see this as an important catalyst to further tax reform particularly relating to foreign managed investment trusts, as the combination of overseas and local capital will be critical to providing adequate housing options and affordability for different tenant cohorts."

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