Build to rent developments to make Sydney more affordable

The state government and private developers are embracing a real estate initiative already thriving in the US and UK, which will put properties on the market for those unable to buy their own homes.

Artist's impression of the new Meadowbank build-to-rent project with 291 apartments and a retail precinct. Picture: Supplied.

More than $500 million in high-rise developments designed exclusively for renters are underway across Sydney to help ease a crippling housing crisis.

Build-to-rent projects in Meadowbank and Camperdown will deliver almost 800 apartments as the local real estate market shifts to cater for residents of the Harbour City unable to buy their own homes.

Popular in the United States and the United Kingdom but still in its infancy in Australia, build-to-rent sees developers construct and retain entire apartment blocks, then rent out all units on long-term leases.

A $280 million project in Meadowbank was announced on Tuesday, featuring 291 apartments plus a retail area with a supermarket and 15 specialty food, casual dining and health and beauty venues.

The mixed-use development known as apt. Meadowbank is due for completion late next year and will feature up to three-year leases for prospective tenants.

Artist's impression of the new Meadowbank build-to-rent project with 291 apartments and a retail precinct. Picture: Supplied.

Located close to several major employment hubs, and within walking distance to bus, train and ferry stops, the project has 65 per cent of inventory earmarked as studios or one-bedroom units.

Closer to the CBD, the NSW Government will deliver the first state-funded build-to-rent housing project, specifically for essential workers, at Camperdown.

The $225 million investment will bring 500 apartments on to the market by 2027.

According to the latest Australian Bureau of Statistics Census data, the number of renting households in NSW increased by more than 17.5 per cent in the five years from 2016.

More than 2 million people across the state were renting in the private rental market.

In an attempt to ease the housing crunch, which has also seen rents rise substantially, state and federal governments are now offering tax concessions to make build-to-rent more attractive for private developers.

Apt. Residential is developing and managing the Meadowbank project, with Managing Director Matt Carolan saying: “The federal government recently reduced the withholding tax for global capital investing in build-to-rent developments, from 30 per cent to 15 per cent.

“This brings it in line with other asset classes and makes it more viable to develop new rental housing in Australia.

“In return, developers must offer minimum three-year lease terms, have single entity ownership for at least 15 years, and ensure at least 10 per cent of the apartments are affordable.”

Business Sydney executive director Paul Nicolaou said the projects would help get key workers in housing. Picture: Richard Dobson

Business Sydney executive director Paul Nicolaou said the Meadowbank project “is an excellent example of the private sector and local government moving the needle on housing supply” and provides a blueprint for other parts of Sydney.

“It addresses the housing needs of essential workers enabling them to live closer to where they work,” he said. “It’s a template that could also be influential with the renewed focus on the redevelopment of Parramatta Road to deliver thousands of additional housing units.”

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Originally published as Build to rent developments to make Sydney more affordable