According to The Australian Financial Review, the sharp slowdown in private housing development gives Australia an opportunity to expand the small but fast-growing build-to-rent asset class, consultancy Urbis said, as it presented figures showing new apartment project launches halved in the June quarter.
New apartment project launches totalled 23 nationally in the June quarter, down from 60 in the same period a year ago. There were just 55 launches in the first half, putting the country on track this year to record half of last year's total 199 launches, itself half of the 2015-2018 average of 407 projects, the consultancy's Q2 Apartment Essentials Report shows.
But the report also shows the pick-up in build-to-rent accommodation. In the year to June, 3305 BTR units were approved nationally and 1895 built, up from the 2645 approved and the 1812 constructed a year earlier. The sector was growing and now was a good time to push it harder to ease the country's housing shortfall, Urbis director Mark Dawson said.
Mirvac has led the nascent sector with projects in Melbourne and Sydney but others are also joining in, such as Queensland developer Homecorp Property Group, Grocon, the family-owned Suleman Group in Melbourne and even US property giant Greystar.
Major hurdles remain. The federal government's refusal to allow BTR investors the same reduced withholding tax rates as allowed for student accommodation and other commercial property investments raises the cost of developing them. State land taxes are also a barrier.
Diversified property group Mirvac last month said it would refocus its build-to-rent strategy to NSW after that state government slashed land tax for the asset class by 50 per cent and introduced planning policies that could potentially fast-track approvals for future projects.
If the sector could be shown to work in Australia, capital would pour in, Mr Dawson said.
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