The number of build-to-rent properties across the country is set to reach 16,000 by 2027 based on just existing projects, with that number expected to rise in the coming years with new opportunities identified by developers.

In the wake of land tax reductions in NSW and Victoria made in 2020, 40 projects were announced and approved which amounts to over 12,000 units and approximately $9.6 billion in investment.

Commercial real estate services company Cushman and Wakefield’s Head of Metropolitan Markets, Lukas Byrns, tells The Urban Developer that build-to-rent will alleviate housing stress.

“We have witnessed a dramatic influx of investment into the build-to-rent sector since 2020 and a sharp increase in active groups. They are typically backed by domestic and foreign capital and aim to develop portfolios of up to 5000 units over the next five to seven years,” he says.

“Population growth supporting tenant demand, higher rents increasing investor returns, and a significant amount of capital targeting Australian housing are all tailwinds for build-to-rent over the next decade.”

With the number of active groups in the build-to-rent market jumping from 12 to 35 since 2020, new developments are expected to add significantly to the construction pipeline as they are announced.

There are just 1,800 build-to-rent properties in Australia at present. Victoria is the scene of major BTR development, with 2,700 properties over seven projects located in close proximity to the Melbourne CBD. Assemble is leading the charge with nine projects comprising 3,600 units in the federation state, with Mirvac providing 1,500 units across three developments and Home to create an additional 1,600.

Australia’s largest BTR project is currently being delivered by Greystar at South Yarra (pictured top), which will eventually comprise 625 units. The tower is designed by Fender Katsalidis. Investa and Oxford Properties have struck a partnership the pair hope will create a staggering 5,000 apartments.

Despite the land tax reductions, developers still face many hurdles in regards to BTR projects, with a lack of tax concessions and rising costs for both construction and land. It is anticipated Australia will require over 300,000 rental properties by 2029, with BTR developments expected to increase over time.