Developers are planning towers for renters at more up-market suburbs and Bondi Junction’s in their sights

Can’t afford to buy in one of Australia’s most expensive areas? The build-to-rent revolution is about to land in Sydney’s up-market Bondi Junction.

apt.Residential has projects in Ultimo and Bondi Junction is to follow.

The build-to-rent revolution is about to land in Sydney’s up-market Bondi Junction in a sign that the once nascent part of the property industry is going mainstream.

After years of spreading across the nation’s cities and making strong inroads in some of Sydney’s less salubrious suburbs, developers are chasing new projects in increasingly up-market locales.

There is only one building dedicated to the specialist rental apartments in Sydney’s central business district – Indi Sydney, which was developed by Investa and Oxford Properties Group last year and is leasing well.

Now another developer has assembled a site in Bondi Junction that fronts Oxford Street and is planning an entire precinct with 900 apartments. The project, by apt.Residential, will offer tenants an option of staying in the sought-after area as housing prices and rents charged by mum-and-dad landlords soar.

The new form of buildings are founded on the basis that tenants can commit for long terms, matching the time horizons of the institutions that back the projects. The sector has been billed as a potential solution to the housing crisis by bringing institutions into high-rise apartments for the long term and getting projects kickstarted without the need for pre-sales.

The sector is far more advanced in the US and Britain but Australia is fast catching up. The focus has mainly been on Melbourne, where land has been cheaper and the industry has taken off.

It is now making waves in Sydney’s suburbs, from an original base with a Mirvac project in Homebush to newer developments that are spreading across the western suburbs and the north shore. The apartments increasingly are seen as an alternative for a generation that has been locked out of the housing market. Institutions are also keen to invest despite some blocks to foreign investors and planning hurdles.

Big local funds are also starting to make their presence felt. Aware Super is buying a complex that is under construction in Brisbane.

Apt.Residential confirmed that it had secured three prime development sites in the heart of Bondi Junction, with plans to deliver a “landmark” project aimed at addressing the area’s shortage of quality rental housing.

The project is also seen as a way of boosting Oxford Street Mall as it sits next to Bondi Junction train and bus terminals.

It has been backed by the NSW government’s Housing Delivery Authority, which advanced it to the next stage of planning.

Bondi Junction has been identified as a key urban centre with significant capacity for additional housing.

The area’s Waverley Council has set a housing target of 2400 new dwellings by 2029 and the project could account for a third of that total, potentially defusing local opposition as it would concentrate development rather than scatter it through the suburb.

Demand for rental housing in Sydney’s eastern suburbs continues to outpace supply, particularly near transport, and 10 per cent of the project will be devoted to affordable housing.

The new precinct will offer studio, one, two and three-bedrooms units, partly as families are demanding safer tenure in units as the housing crisis bites.

Apt.Residential managing director Matt Carolan said the project aligned with the company’s strategy of high-quality, well-connected rental precincts in areas of strong demand.

“This acquisition is a natural extension of our commitment to creating exceptional rental living communities in Sydney’s most desirable and connected locations,” he said.

“Bondi Junction represents an exciting opportunity to address unmet demand for well-designed rental housing, while also contributing to the revitalisation of the area through upgraded transport infrastructure, thoughtful design, community amenity and place-making.

“With its unrivalled transport connections, strong social infrastructure and proximity to employment, education and lifestyle destinations, Bondi Junction is a prime location for build-to-rent.”

Originally published as Developers are planning towers for renters at more up-market suburbs and Bondi Junction’s in their sights