The Property Council of Australia has called upon the next NSW Government to increase its focus on build-to-rent (BTR) housing amid continued rental vacancy lows.
As Sydney’s rental vacancy rate is now at just 1.7 per cent, Property Council NSW Acting Executive Director Adina Cirson said urgent action was needed.
“As migration and population growth push demand well ahead of housing supply, the existing shortfall of diverse rental dwellings will only get worse,” Ms Cirson said.
“Asset classes like BTR have a significant role to play in the broader housing mix, with the potential to create a more stable housing pipeline that is counter-cyclical and does not rely on presales.
“Institutionally backed BTR could comprise around five per cent of the residential rental pool within a decade – delivering more than 175,000 dwellings across the country, but right now BTR faces significant regulatory, planning, and taxation barriers in NSW.
“With the right incentives in place, BTR could provide an opportunity for government to partner with the private sector to deliver discount-to-market affordable rental houses for essential workers,” she said.
Ms Cirson said the incoming NSW Government should replicate the Queensland Government’s BTR Pilot Project.
“Under the model, the NSW Government would provide a targeted rental subsidy to deliver affordable and market rental housing within BTR developments in NSW,” she said.
“Governments could support developments on privately owned land at the cost and risk of the successful proponent and allow for an expression of interest process for BTR developments on state-owned land.
“Under the program, a set percentage of dwellings can be provided discounted rentals via the subsidy which helps to better align the interest of government and developers and meet the growing demand for secure long-term rental properties.
“Alongside this pilot project, the NSW Government should improve tax concessions for BTR to meet the changing trends across Sydney’s housing market, including exclusion of BTR projects from the Strata Bonds Scheme.” Ms Cirson said while there had been progress, more needed to be done.
“While we welcome the NSW Government’s efforts to date, including the move to fast-track BTR through the planning system, introduce a 50 per cent land tax discount, and removing foreign taxes for eligible BTR projects for the next 20 years, these endeavours have not unlocked the full potential of this asset class,” she said.
“As was recently revealed, only one BTR project has received planning consent in the last two years since the NSW Government introduced the new planning pathway for BTR developments.
“We need to match intent with action if we’re going to truly tackle the rental affordability crisis in this state.”
Media contact: Aidan Green | E [email protected]