Allens and Urbis have called for urgent policy action to encourage build-to-rent (BTR) development in a joint report issued today.
According to the report, Australia must strike now if it is to unlock the full potential of BTR, which could not only play a key role in Australia's economic recovery from COVID-19, but could address Australia's ongoing housing undersupply and ensure the future liveability and resilience of its cities.
Unlike commercial, industrial or traditional build-to-sell residential developments, BTR developments do not require pre-sales or pre-leasing to ensure viability, which significantly reduces development timeframes and creates jobs and investment opportunities immediately.
Conservative estimates made by Urbis indicate that by stimulating BTR delivery even to an initial scale of 10,000 apartments could support an average of 3500 jobs per year linked to the construction phase alone. Increasing that to 50,000 apartments - roughly a third of the inner-city apartment pipeline on the eastern seaboard - could support approximately 19,000 jobs per year in the construction phase alone, as well as an average of $2.9 billion in Gross Value Added.
By generating enough housing supply to meet current and future demand (from diverse segments of the population at different price points), BTR also offers a solution to Australia's housing undersupply issues, which endure despite the suspension of international migration.
'Now more than ever, we need policy change in this sector, requiring a strong commitment from all levels of government to reduce barriers to BTR viability,' said joint lead author Tim Chislett, a Partner in Allens' Real Estate team.
'If policy settings allow, BTR development will get cranes in the sky more quickly than any other asset class, promoting economic recovery from COVID-19 while addressing Australia's ongoing housing crisis.'
'BTR is the quickest solution to increase housing choice and capacity at scale,' said joint lead author Mark Dawson, Director at Urbis.
'Despite current reduced migration rates, Australia still has a considerable housing demand gap that needs to be plugged. BTR provides an opportunity to increase supply, improve housing options and ensure Australia remains a liveable and resilient country into the future.’