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Developers will be watching with keen interest.
The norm in Australia is for developers to build apartments that are sold to owner-occupiers or individual investors, whereas developers of build-to-rent properties keep them and generate ongoing income as a large-scale landlord.
The build-to-rent model has already made significant inroads in the past 12 months, with more than $1 billion worth of projects now planned across the country.
With the renter demographic growing in Australia, a downturn in the property market hampering off-the-plan sales, and a federal election on the horizon that may see negative gearing limited, Mr Dawson said it was crunch time for many developers seeking out other ways to make a profit than the traditional build-to-sell model.
If the market takes off, there could be 100,000 build-to-rent units across the eastern seaboard within a decade, Urbis predicts.
“It’s about seeing how it plays out here. Is it something customers are prepared to pay a premium for and to what extent is it going to drive returns overall to the point they become attractive enough to compete with other land uses?” Mr Dawson said.
The above is an excerpt from The Australia Financial Review. To continue reading the article, please click here (paywall).
