Build-to-rent projects could be answer to rental crisis, but more developer incentives needed

With the announcement of a 37-level build-to-rent apartment tower in Brisbane, is this an emerging scheme in Queensland and could it solve one of the state’s greatest issues?

Build-to-rent developments could be a crucial part of a multi-pronged approach to Queensland’s housing and rental crisis, but more incentives are needed to grow the scheme.

Rather than being sold to private individuals, build-to-rent properties are retained by the developer who oversees the renting of the residences and manages the complex.

REIQ chief executive Antonia Mercorella said more than 90 per cent of the state’s rental properties are owned by private individuals or companies.

REIQ CEO Antonia Mercorella. Photo: Stewart McLean.

“Build-to-rent is a little different, it’s not something we see too much of in Australia, the tax settings don’t make it too attractive,” she said.

“The idea behind build-to-rent developments is that they are built for use as long-term rentals, which we think could be very advantageous.

“I think they could be part of the solution to the rental crisis, but most people agree that we need to do more to encourage build-to-rent schemes in Queensland and Australia.”

Ms Mercorella said the idea was raised at last year’s state government Housing Summit.

“We need a multi-pronged approach (to the rental and housing crisis) and this is one of the important limbs that could be part of the solution,” she said.

“Build-to-rent schemes are generally large complexes where you can house a multitude of tenants and it gets the job done of housing Queenslanders quicker than trying to build multiple freestanding houses.

“But the reality at the moment is that there is not a great deal of incentives to construct build-to-rent schemes.

“For these to get more traction we need to see tax settings reconsidered and adjusted in terms of GST and the margin scheme, as well as land tax concessions.”

The Queensland Government has established a build-to-rent pilot project. It provides a rental subsidy for build-to-rent tenants in Brisbane. It initially aimed at developments on privately-owned land but has since expanded to include an expression of interest on state-owned sites.

The project is committed to supporting two developments so far – a Frasers Property building at 210 Brunswick Street in Fortitude Valley, and a Mirvac development at 60 Skyring Terrace in Newstead. Combined they will offer almost 750 apartments in total, with up to 240 of these dwellings to be offered at a discounted rent.

There are also private build-to-rent projects either under construction or in the pipeline at Browns Plains, Bowen Hills, Calamvale, Chambers Flat, Coomera and Robina.

QCOSS chief executive Aimee McVeigh.

Queensland Council of Social Service chief executive Aimee McVeigh said 46,000 Queenslanders are currently on the social housing waitlist.

“Build-to-rent developments can have a positive impact on rental affordability as a result of there being more homes available, and are particularly welcome when they include affordable housing, like the developments subsidised through the Queensland Government,” she said.

“Queensland needs 5,000 social and affordable homes built each year to help fix the state’s housing crisis. Government and the community and private sectors all have a role to play in increasing housing supply in Queensland.”