The fledgling sector with just 3500 units nationally in planning and development will pick up this year as declining land prices will boost the viability of a commercial asset class hampered by a 30 per cent withholding tax and other hurdles, CBRE says in its Australia Real Estate Market Outlook 2019 report.
"Cheaper residential prices are good for people wanting to buy a house, said CBRE's Australia head of research Bradley Speers. “And it also makes build to rent more economical because if you're doing more development and say your land cost $50m, then if suddenly the land's worth $25 million, then your investment is going pay off a lot better.
"Hitherto one big difficulty with build-to-rent is that the potential returns aren't as attractive as you might get from other assets classes but this is making it more financially viable."
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