Built-To-Rent Boom
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Built-To-Rent Boom

It is no surprise that the COVID pandemic has altered the property market and how Australians view the real-estate sector. With many Australians working from home amidst the pandemic, convenience was king, and having a comfortable space with access to amenities was massively desirable.
POSTED
11.05.2021

Due to the ever-inclining prices of Australian property, the Australian Bureau of Statistics found homeownership fell from 70% in 1998 to 66% in 2019 – the lowest since 1994. Equally, in 1994, the median price of a dwelling in Sydney was recorded at $152,500(1), however, by 2020 this had jumped up to $872,934(2). This higher entry point to the market has priced many Sydney-siders out of the buying market, and into renting. In addition to these statistics, according to Insider(3), in 2020 Melbourne and Sydney were ranked as the 3rd and 4th most expensive cities to live in globally.  These circumstances have paved the way for the Build-to-Rent (BTR) model to soar in popularity, to offer affordable solutions for urban living.

British Architecture firm Assael Architecture have been pioneers of the BTR movement, as opposed to the classic build-to-sell model that has previously had a strong-hold over the development market. This new model offers flexibility, comfort and convenience for tenants. Loren Thanyakittikul, director of Assael explains how,  “We know that investing time in researching and developing the product itself is key if you want to attract the core audience of future renters…so getting the quality right is important – particularly when it comes to communal spaces.” These communal spaces include residents’ lounges, fitness centres, yoga studios, games rooms and co-working areas. The purpose of this model, and these amenities according to Assael is to take the stress out of the renting experience, by offering living situations that are fully-equipped, fluidly functional, no agents fees, smaller deposits and more flexible tenancy times. 

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Built-To-Rent Boom
Built-To-Rent Boom

As well as offering general convenience and affordability, the BTR model is a great investment opportunity and can provide a stable and reliable stream of returns for investors.  According to Paul Winstanley, the head of BTR for Sydney and New Zealand at commercial real-estate company JLL,  the  BTR model “could be key to helping solve the housing crisis and provide investors with predictable long-term returns in the process”.  

The sea-change towards this model is already well and truly underway, with more than 30 major BTR projects (totalling 11,667 homes) confirmed to be already in the works domestically over the coming year. Furthermore, the NSW and VIC State Governments have announced their support for this market, and are providing measures to encourage domestic and international investment in BTR. The government support and growing need for rental properties has attracted investment to the market, with AustralianSuper making a 25% cornerstone investment into Melbourne-based developer Assemble Communities in June of this year. 

Ultimately, the BTR model will re-invigorate Australia’s property market, offering long-term, convenient tenancies for urban professionals, and desirable assets for investors alike.

“The purpose of this model, and these amenities according to Assael is to take the stress out of the renting experience, by offering living situations that are fully-equipped, fluidly functional, no agents fees, smaller deposits and more flexible tenancy times. ”

Built-To-Rent Boom

“The purpose of this model, and these amenities according to Assael is to take the stress out of the renting experience, by offering living situations that are fully-equipped, fluidly functional, no agents fees, smaller deposits and more flexible tenancy times. ”

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