Community at the heart of renters’ new option

A new housing type is emerging across the country, taking some of the pressure off the squeezed rental market, which recently hit an alarming new low.

Tom Pospieszny with Joshie and partner RJ Wikaira, who live within Mirvac’s new Build-to-Rent development at Olympic Park. Picture: John Feder

A new housing type is emerging across the country, taking some of the pressure off the squeezed rental market, which recently hit an alarming new low.

Long-term, corporate-owned rental housing has been a staple of the UK and US property markets for decades. But local developers and investors have only relatively recently gotten behind Build-to-Rent (BTR), with locations only now starting to open up.

Not to be confused with social housing, these residences in Australia typically offer premium amenities focused on community-building – such as common areas, shared work spaces and hireable entertaining spaces – at a higher price point than the broader rental market.

Property developer Mirvac has emerged as one of the market leaders, with 2100 apartments at various points of development down the east coast. Angela Buckley, Mirvac’s BTR general manager, said the apartments are designed a little differently than those traditionally made to sell, typically being smaller but with a greater emphasis on using common spaces

“Interestingly, we find that because people have access to those spaces, they might not necessarily need as large (an) apartment as they would in a traditional space,” Ms Buckley said

As it stands, the vast majority of rentals in Australia are provided by mum-and-dad investors, who have been underactive in the market for several years. Rental vacancy nationally currently stands at 1 per cent according to SQM Research, well below a “healthy” rate of 3 per cent.

Fierce competition for the slim number of properties available across the country has caused the time it takes for a home to be leased to shrink to a record low of just 19 days, with PropTrack analysis showing time on market is even shorter in Brisbane (15 days) and Sydney (18 days). At the same time, the number of homes available to rent has been trending lower since the pandemic began. Total rental listings on a national level are now almost a third lower than pre-pandemic levels (down 31 per cent).

Ms Buckley said it is important to offer more choice to the market, giving people greater short- and long-term options.

PropTrack director of economic research Cameron Kusher said longer and more secure rentals were needed, particularly as more Australians are likely to choose not to buy homes as property prices lap wages.

“We have seen homeownership rates reducing over time because of market factors,” Mr Kusher said “Not everyone going forward is going to want to own a house, and they’re probably not going to want to sign a new lease every six or 12 months.”

Tom Pospieszny and partner RJ Wikaira, aged 41 and 44, are enjoying the flexibility and security given they have yet to decide if they want to move overseas. Initially worried they were getting sucked in by good marketing, they say they made the right decision to move into Mirvac’s Sydney Olympic Park precinct. “It’s all designed for renters to live your best life,” Mr Pospieszny said “You can find your tribe, it’s a community.”

Ray White chief executive of property management Emily Sim hopes greater rental opportunities will have the added benefit of freeing up homes and pushing down rents.

But Mr Kusher said the burgeoning market housing type is yet to have any material impact.