Build-to-rent should be Australia’s future, property pundit says

Adam Smith 26 October 2017

Tower crane on apartment buildingBuilding developments for the sole purpose of renting could help tackle housing affordability problems, a property industry leader has claimed.

Mirvac chief executive and Property Council president Susan Lloyd-Hurwitz has told the QUT Business Leaders’ Forum that a build-to-rent strategy is “something that should exist in Australia”.

“It’s an opportunity to have much more affordable housing,” she said.

Lloyd-Hurwitz said build-to-rent didn’t exist in Australia for a host of reasons, including the low yield caused by tax structures.

Renters could face tough market ahead

“It doesn’t exist as an asset class, but elsewhere in the world build-to-rent is the largest real estate investment asset class,” Lloyd-Hurwitz said. “Investment asset class is the most highly valued income stream in real estate but in Australia, we insist on thinking about it as a capital gain play and that is what stops institutional income-focussed groups from taking on build-to-rent.”

Lloyd-Hurwit urged all levels of government to support the build-to-rent industry. She pointed to the UK, saying build-to-rent did not exist in the country six years ago, but now represents £6 billion in development.

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