17th Dec, 2018

Is Australia Ready to Rent and Roll? Build to Rent: The Emergence of a New Real Estate Asset Class

The Build to Rent market in Australia has immense potential to scale with a very conservative market value of $40 billion equating to less than 1% of all Australia’s residential housing stock. Unsurprisingly, media and property industry groups are buzzing with the hype surrounding build to rent and the asset class’s perception as a solution to the growing affordable housing shortage.

Unfortunately, unfavourable taxation treatment and unnecessarily restrictive planning regulations have created a hostile environment for BTR to blossom. Perhaps the greatest hurdle that BTR projects must overcome is financial viability. Performance indicators such as project internal rate of return will always place BTR a distant second to a for sale development.

In this paper, we explore the likelihood of  BTR to become an established asset class in light of the current political, legal, and economic conditions steering the direction of the Australian market.