Photo: Sydney Olympic Park; Herald Marketing
We read a report recently that spells out what we suspected about Build-To-Rent (BTR), and then some – it appears to us that it is a scheme to make our Families life-long tenants – this article said it was ‘a fake affordability cure’.
What it boils down to … it will add another ‘PRESSURE GROUP’ of investors/corporations to the housing market and increase their humongous lobbying power to GOUGE TENANTS even more!
NOTE … only BTR that would be run by a Labor Government or one which offers the prospect of ownership would assist those seeking home ownership!
And as revealed in the AFR ‘Build-to-Rent pulls a 20pc premium on traditional rental’ by Michael Bleby:
BTR attracts a 20pc premium in rental income over build-to-sell apartments of the same size, according to a report from a third party! For a one bed apartment in Sydney Olympic Park the rent is 19% higher than an equivalent build-to-sell unit, and the difference is 27% for a 2 bed unit!
For almost a decade now we have had the LOWEST WAGES GROWTH for some 60 years … this was indelibly set in train back in the Howard Liberal Government of the late 1990s when it introduced Visa workers to compete for jobs to maintain low wages.
Currently we have some 60% home ownership, and declining rapidly with a whole Cohort locked out of the market and renting …
In the 70s we had 70% home ownership
BTR enables the wealthy investors and corporates to develop an apartment complex to lease all the dwellings.
It is said to be very successful in the United States and the UK, and now in Australia like the US we too have a whole Cohort of the ‘Working Poor.’
An EY report assesses there will be 175,000 new BTR homes in Australia … with $100B pipeline of development in a decade!
The BTR sector promote affordability, security and a stable lease reducing the necessity to move so often.
However questions have been raised like:
-How can corporatizing the rental market deliver lower rents?
-How likely is it that a corporation would charge any less than a landlord?
-Would they be more or less responsible for maintenance?
IT appears to us at CAAN that ‘The Haves’ will only grow their wealth … and real estate rogues are set to make even more when managing whole blocks … even precincts … The housing supply would certainly grow but what of the ScOmO high influx of migrants increasing the demand?
AND … of course ‘they’ (investors and corporates) re after ‘tax breaks’ on GST and Land Tax for these BTR projects …
Currently there are two completed BTR developments.
On Queensland’s Gold Coast Australia’s first and largest BTR located at the Commonwealth Games Athlete’s Village. It is a development of 1,251 dwellings on a staged release strategy over 3 years. With hundreds of ‘homes’ left vacant! A strategy to maintain high rentals!
The Abu Dhabi sovereign wealth fund owns this development! Not the Australian Government …
Mirvac’s Liv BTR project at Olympic Park, has rents 10% to 30% above the local market rate. The rents last year ranged from $535 a week for a one-bed apartment, $615 for a two-bed, and more than $1,000 for a three-bed apartment.
To max their investment they provide packaged gyms, facilities, appliances and services
The property media tells us there is a shortage of development sites. So what has happened now? Have low rise areas been rezoned for a Pipeline of BTR development?
What of the social and environmental impacts of migration fuelled rapid population growth?