As the dream of home ownership becomes more and more difficult for some, the Australian market is beginning to find more ways to house the increasing population.
One of those that is gaining momentum across the country is the build-to-rent scheme — the idea that private residential property is built to rent rather than sell.
Although something relatively alien in Australia, in the United Kingdom, the build-to-rent sector (known as the Private Rented Sector (PRS)) has grown steadily over the past decade from a relative standing start to the second largest form of tenure in the UK.
Trends that have emerged in London, where the costs of home ownership are high and work and leisure opportunities are largely centralised in inner-city areas, may gain momentum in the Melbourne and Sydney housing markets.
This prediction has recently been backed up by Jeremy Schluter, a senior associate with design studio, Hassell. He notes that the number of rental households has increased, with capital city housing prices rising by 15 per cent in just five years.
“The BTR model is slowly catching on, with a total of 4600 apartments planned across 11 national projects over the last three years,” Mr Schluter wrote in Architecture and Design.
Diversified property group Mirvac has been taking advantage of these trends and are now set to transform a key site next to the historic Queen Victoria Market into Melbourne’s first build-to-rent complex. This follows their first build of this type – Pavilions at the Sydney Olympic Park, which is due for completion next year.
The up-and-coming scheme is being looked into with great interest by the government. Parliamentary Secretary to the Treasurer, Steve Dimopoulos, is leading a working group looking at opportunities and barriers, with the overall goal of increasing housing supply to the rental market and providing more social and affordable housing.
Meanwhile, 393 Macauley Road, Kensington, a project of residential developer Assemble, has come up with its own ‘hybrid’ scheme, of build-to-rent-to-own.
Here, the rent is agreed upfront and calculated at market rate, which gives renters stability while they save. After renting the apartment for up to five years, the occupants have the option to buy for a fixed price at the end of the lease.
As build-to-rent gains momentum, it’s hoped the scheme can be correctly used to revolutionise the rental experience with improved choice, quality, and security of tenure.
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