The build-to-rent model could eventually help address the Illawarra’s housing affordability issues, a property industry advocate suggests.
Under the build-to-rent model, investors team with developers and governments to build high-quality apartments at a large scale, solely for the purpose of renting them out at an affordable price.
On Friday, NSW Minister for Social Housing Pru Goward announced the introduction of a build-to-rent model to be used for a site at Redfern to deliver more social, affordable and private housing.
The NSW Government’s build-to-rent model is part of the social and affordable building program, Communities Plus.
The pilot site at Redfern is Australia’s first government initiated build-to-rent development.
The government will lease the land under a long-term lease (40 years).
Investors will then construct the development and collect rental income over the lease period.
Thirty per cent of the development will be committed to social housing, with the remaining 70 per cent expected to be rented at market rent.
At the end of the lease, the land and buildings are to be returned to the government.
The Property Council has advocated for the establishment of the build-to-rent sector in Australia.
“The announcement by the NSW Government is a positive first step towards establishing a build-to-rent sector in NSW and providing more diverse housing options for the community,” Michelle Guido, Property Council Illawarra regional director said.
She said it could provide another option for addressing housing affordability in the Illawarra.
“With more people renting in NSW than ever before, it is likely we will see increasing growth of the rental sector in the Illawarra region over the coming years,” she said.
“It is vital that we continue to be forward-looking and open to innovative housing options in the region to meet the needs of our growing community.
“The build-to-rent model can provide affordable housing, as we have seen in the Sydney model announced this week, and also meets the changing needs of our local community.
“It can create more options for renters in the region by providing more secure, longer term rental properties with great amenity, and increases rental supply.”