Australia is experiencing a severe housing affordability crisis.
National rental vacancy rates are now the lowest on record and likely to continue to fall.
Australia’s demographics and needs are changing and therefore planning and delivering a diversity of housing options to suit individual circumstances is critical to success.
In this report commissioned by the Property Council of Australia, EY considers that the emerging build-to-rent sector is a component of the solution in offering a diversity of housing at scale and at velocity, to alleviate Australia’s housing crisis.
And the findings are significant.
The report shows there’s a potential for more than 150,000 new build-to-rent homes that could come to market in the next 10 years.
Build-to-rent housing is potentially a major and logical part of the solution to delivering the government’s 1 million homes target.
Amending the managed investment trust tax regime to be on a ‘level playing field’ with other institutional asset classes could be a powerful lever to utilise in providing housing supply efficiently and at scale.
EY estimates that the current size of the build-to-rent sector in Australia is $16.87 billion (this equates to roughly 0.2 per cent of the total value of the residential housing sector), with the expectation that this value will continue to grow in the coming years. If it reached just 3 per cent of the residential market, it could be worth $290 billion.
In comparison, the build-to-rent sector comprises of 5.4 per cent of the total value of the residential sector in the UK and 12 per cent in the US.
Access resources and find out more about the report below.