Build to Rent a Reality

Australia’s first government initiated Build-to-rent development was this month announced in NSW by Minister for Social Housing Pru Goward after a focused advocacy effort to establish the sector in Australia by the Property Council of Australia.

The development, to be built on the Redfern Communities Plus site, will be the nation’s first ever Build-to-Rent housing model to integrate social and affordable housing with housing supply for the broader community.

The Government will lease the land under a long-term lease.  Investors will then construct the development and collect rental income over the lease period. Thirty per cent of the development will be committed to social housing with the remaining 70 per cent to be rented at market rent. Like all Communities Plus projects, the entire project will be exempted from land tax.

At the end of the lease, the land and buildings are to be returned to the Government.

The EOI for the development is excepted to be released shortly.

Jane Fitzgerald, Executive Director of Property Council NSW, who was present at the announcement, said “This is a great first step towards establishing a Build-to-Rent sector in NSW and an example of a Government willing to get on with the job of providing more private and affordable rental housing.

“The Property Council has strongly advocated for the establishment of the sector in Australia and it is great to see the NSW Government seizing the opportunity.

“There are more people than ever in the community who are renting and Build-to-Rent is the perfect product to meet this demand.”

“Although the project is modest in scale, it is a big step forward in two key respects.  Symbolically – it is a public expression of commitment from this government to the concept of build to rent perhaps more importantly, the government has put its money where its mouth is – in contributing land for the project – and exempting it from land tax they had created an interesting and attractive institutional investment opportunity.

“The EOI process provides an opportunity to properly test how the model announced – which is not the traditional multi-family model we have seen overseas – stacks up .

More information can be found here

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