To reiterate – I support the property industry delivering as many homes, across all typologies, as possible, including BTR. All typologies should have a level playing field with other asset types.
🏢BTR certainly has the potential to offer some valuable things to long-term renters: ✅Greater security of tenure ✅Better and more professional service (on average) – compared to some individual investors/managers ✅Better facilities and maintenance – due to building single ownership
There’s only one, fairly large issue – what can be delivered feasibly is not “affordable”.
Given the costs of apartment development, the business model for Build to Rent relies on: 💵Premium market rents; or 💵Rental subsidies
Or a combination thereof.
Any affordable component needs to be subsidised, by the other renters so market rent is higher, or it needs subsidies from the States or Commonwealth (in cash or cheap land). You certainly won’t see many 3 bedroom #familysized BTR #apartments.
Changing Managed Investment Trust rules will make no difference to the underlying #feasibility of these projects. It will help bring more foreign capital sources to the table once projects become feasible again.
The only way we’ll approach 105,000 new dwellings in this space is with significant incentives and subsidies, potentially at the cost of other initiatives. MIT rules changes alone will not get us there.
BTR will not be a silver bullet to housing affordability as some in government have been led to believe. Plus, 105,000 dwellings over the coming decade, if we get there, is only around 5% of the homes needed to be built across the country over that period.
Build it all, I say – but I maintain that fixing the fundamentals of planning, reducing development charges and taxes, for market and rental housing alike and in all contexts, would be effort and money better spent than an overt focus on particular housing classes.
🤔Thoughts? (Come at me Mike Zorbas!)