Wednesday 5 June 2024
MEDIA RELEASE
Federal build-to-rent Bill still not fair to housing supply
The Property Council of Australia has today welcomed the introduction of the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Bill 2024 bill as recognising the role of build-to-rent (BTR) housing in Australia but warned it does not create a level pathway to support 150,000 new BTR homes by 2034.
It has been a decade since the Property Council first proposed levelling the investment pathway, but successive Australian Governments have been slow to catch up to the UK where BTR supplies five per cent of housing supply and the US where it is 12 per cent. In Australia, BTR makes up only 0.2 per cent of the housing market.
Property Council of Australia Chief Executive Mike Zorbas said the detail of the legislation doesn’t live up to the government’s intended goals.
“The legislation does not match the government’s welcome ambition to get us to the 150,000 homes we know are possible, as modelled by EY,” Property Council Chief Executive Mike Zorbas said.
“Right now, we have some of Australia’s best companies seeking investment partners to create a watershed new housing option. And yet it is easier to invest in every other kind of property that builds our cities than the new homes we desperately need, and that a level investment pathway would unlock.
“This legislation does not yet level that pathway and it fails to equalise the treatment of early adopters, leaving a future market less liquid than it needs to be.
“We urge the government, the opposition, minor parties and independents to work together to level the investment pathway for those 150,000 new homes.
“Investment for all housing is thin on the ground just when labour and material costs are peaking and planning systems are stuck in the 1980s.
“This is an historic opportunity for the parliament to create 150,000 new homes and better housing choice for all Australians, in our joint ambition to hit the nation’s welcome 1.2 million new home target. But in order to do that, this legislation must be fixed.
“Property Council members and investors are the only potential providers of this kind of housing at the scale needed and have already trialled successful projects across the country,” he said.
Changes needed to make investment in housing equal to other property projects
The requirement for a proportion of affordable tenancies to be provided duplicates many already imposed by state and territory governments, and in some cases, local governments. The Property Council supports the provision of affordable housing in a way that protects project feasibility and advocates a differentiated 10 per cent withholding tax rate to attract investment in affordable housing. According to analysis from EY, this could accelerate the delivery of 10,000 affordable homes,
Existing projects should be grandfathered into the new framework at the cost of seven million dollars over a decade. Failing to extend the measure risks stranding these assets, and risks removing rental stock from the market.
ENDS
Media contact: Rhys Prka | 0425 113 273 | [email protected]
Ellie Laing-Southwood | 0416 007 830 | [email protected]
What is build-to-rent
Build-to-rent, or multi-family, housing is purpose built and designed long-term residential rental accommodation which is predominantly owned, managed and operated by an institutional investor for a long-term investment period.
Build-to-rent housing:
- Reduces transaction/moving costs providing a superior savings pathway because long rental tenure is encouraged
- Provides superior amenities, apartment personalisation and dedicated management services
- Smooths the construction cycle as patient institutional capital is willing to invest year in year out and has no pre-sale hurdles
- Increases housing supply in desirable inner-middle ring locations, leveraging off private and public infrastructure including additional amenity and public transport