Build-To-Rent: why our cities need change
Western Australia's rental market is a hot topic with REIWA recently declaring a 'rental crisis' due to Perth's vacancy rate dropping to the lowest it has been in 13 years. ABS demographic forecasting indicates that WA will need an additional 41,830 rental dwellings by 2030 and the supply of housing is a key pillar of the WA State Government's 2020-2030 Housing Strategy, which sets an ambitious target of supporting 130,000 households to access private rental homes.
Urgent action is needed to remedy the widening housing supply gap and with the appropriate regulatory support, the build-to-rent (BTR) sector could play a key role in the solution.
In our second major report on the BTR sector, Build to Rent: Stimulating Recovery, Ensuring Resilience the teams at Allens and Urbis advocate that BTR is not only a quick fix to our housing supply issues, but is a lever for economic stimulus which could play a key role in propelling economic recovery from COVID-19.
Compared to the build-to-sell sector, BTR developments uniquely do not require pre-sales or pre-leasing to ensure viability. This means that development timeframes are reduced and benefits associated with BTR (e.g. stimulus to the construction industry driving job growth and diverse housing options) can be rapidly obtained.
There is some traction in the fledging BTR market, with Perth being home to Australia's first fully operational BTR facility (Sentinel's Element 27 in Subiaco), and a number of BTR developments in progress on the East Coast. However, notable barriers to financial viability for developers are inhibiting momentum including Federal Government's Managed Investment Trust regime, State land tax and State planning policies which do not distinguish between BTR and build-to-sell developments.
Our report calls on all levels of government to address these issues to unlock the opportunities BTR presents, to both the Australian economy and our future cities. This sentiment is echoed by the Property Council in its Western Australia State Budget Submission 2020/21, which calls on the State Government to champion a BTR sector in WA.
Allens is thrilled to extend Property Council members an invitation to our Build-to-rent: why our cities need the change webinar on 25 November 2020. Our panel of Allens and Urbis BTR experts, will be discussing key the findings from our new report, opportunities for BTR and more. If you are interested, please register here.
Ilaria Corbett is an Associate at Allens and sits on the WA Future Directions Committee.
Welcome back the new year with a discussion on the new opportunities that Build-To-Rent brings for WA at our Build-To-Rent Sundowner early next year.