Home Property Australia Chief Executive | BTR housing: Feds hold National Cabinet housing targets in the balance

Chief Executive | BTR housing: Feds hold National Cabinet housing targets in the balance

  • April 17, 2024
  • by Mike Zorbas
The government has a target of 150,000 new BTR dwellings over the next decade

BTR housing, the policy no brainer

Deadlines, targets matter.

So it is for housing Australians in the face of a worsening supply crisis.

You will not hear a stronger voice than the Property Council in support of the National Housing Accord targets. None. A most welcome necessity.

Yet. Urgent constructive criticism of the federal government’s approach is needed where it undermines those same welcome targets.

Build-to-rent housing (BTR) communities are the secure tenure, customer led policy option that most quickly add to overall housing supply, alongside purpose-built student accommodation (PBSA) and retirement living communities.

In lock step with true planning reform, BTR policy settings will be the make-or-break policy decision in meeting the 2029 housing targets. Daylight third.

Left hand meet right hand

By the federal government’s own hand, the 1.2 million home target agreed with Premiers swings in the Treasury wind as we speak.

Federal Cabinet and state premiers will not yet have seen any twists and turns in the draft BTR legislation which finally dropped this week, months late.

Neither will the stewards of 80 per cent of all investment in Australian BTR housing to date: offshore institutional investors.

Perhaps more than the recent investment repelling ThinCap excesses, the people who might capitalise all these new homes won’t like the policy emerging from the government.

Perhaps state premiers and planning ministers will share that view at a time where high input costs across the board are mitigating against commencement of so many different forms housing.

Getting BTR off the ground in Australia has so far relied on the assumption that the federal government is willing to add to housing supply by making investment sustainable as US and UK governments have.

Tens of billions have been invested into Australia on this premise based on the government’s own statements.

Too bad only a handful of new projects have commenced in the last twelve months.

What you say? The government trumpets 150,000 new BTR dwellings over the next decade but is accidentally working against meeting the National Cabinet agreed housing targets? Time will tell.

Moreover, next to our ten trillion-dollar housing market, BTR housing is a baby.

Without urgent changes, a liquid, scalable BTR market evaporates

The money invested to date has been developing the BTR housing operational muscle across leading companies.

BTR is only 0.2 per cent of the Australian housing market vs 12 per cent in the US.

BTR housing is not yet a liquid, investable asset class with a stable future.

It does not offer institutional investors the returns of other property types.

The government can rectify this.

Solutions time

This week and next we are feeding back on the draft legislation.

If accepted, this feedback will help the government and National Cabinet to reach their housing targets and help boost supply faster than any other housing method.

BTR has demonstrated itself to be a superior form of rental housing, employment and quality home supply at a volume and speed potentially well in advance of other forms of housing, bar PBSA and retirement living communities.

The Federal and National Cabinets are still committed to plugging the growing housing gap but the settings they put in place matter more than ever.

The BTR legislation will be the proof of that commitment for every single institutional investor in the customer-led, high amenity and speedily produced communities Australians so desperately need.

More next week.

Condolences and support

Before you continue, please note I intend to write briefly below about the events that occurred in Bondi Junction at the weekend.

What happened at that busy suburban shopping centre on Saturday was shocking and deeply upsetting.

I know many people, including some of our own Property Council team who were inside or had just visited the shopping centre that day, remain shaken by what occurred.

Above all, we send our heartfelt condolences to the victims, their families and friends, as well as the first responders and police who were so brave.

Property people strive day in day out to create places where others can connect, have fun and feel safe.

We send our support and strength to our Scentre Group colleagues and their extended family of tenants who continue to deal with the aftermath of this tragedy.

A reminder also that help and support is available through many avenues including Employee Assistance Programs and services like Lifeline.