Will the Build-to-Rent Model Fix Australia’s Housing Crisis?
After its success in Europe, Australia is trying its hand at the Build-to-Rent (BTR) model. But will it be enough to end the country’s crippling housing crisis? In short, probably not.
BTR is a concept where dwellings are built by developers who will then hold onto ownership to rent directly to tenants rather than sell them off.
In today’s cutthroat rental market – it seems like a great idea. But BTR on its own, simply won’t be enough to tackle the housing crisis. Instead, it’s just one piece of a very complicated puzzle.
Here is a flow chart showing how housing stages move within the Australian market.
This shows where BTR can be implemented as a strong rental option for those struggling to find somewhere to lease.
On the plus side, BTR projects can provide more security both for tenants to live in a residence they know the owner won’t take off the rental market and for the developer in terms of tenure. Plus, it helps add to the dwindling supply of available rental stock in Australia.
But what it fails to do is aggressively address rental affordability. It can also make the transition up the ladder towards homeownership even more difficult with rent making up a greater portion of average pay.
While everyone’s circumstances vary, where possible, we should still be encouraging people to move up that ladder.
And once they’ve reached the top, we need to make it attractive to top-tier homeowners without mortgages to get back into the property market to boost private rentals.
Private investors can be a key supply source for affordable rentals, particularly when they avoid turning to short-term stay options such as Airbnb.
In the 2021 census, 66% of Australians were owner-occupiers. This is down from the traditional 70% mark that we’re used to seeing with glaring economic factors and funding restrictions to blame.
The housing crisis has been brewing silently for years and now we’re paying the price. There’s no easy fix, except for long-term strategic change that requires us to roll up our sleeves and start now. But one thing is for sure – the four-year political cycle ribbon-cutting exercises simply won’t do the job.