Latest news with #buildToRent
Yahoo
2 days ago
- Business
- Yahoo
Housing solution given major tax boost as Australia faces 'critical problem'
A tax break will be extended 'indefinitely' for owners of new build-to-rent developments as the NSW government tries to boost rental supply in the country's most expensive property market. The change was announced today ahead of the state budget, alongside rules to help fast-track infrastructure. The NSW budget will extend the 50 per cent land tax discount on build-to-rent developments indefinitely. The tax break was due to expire in 2039 under the previous government. University of Queensland Professor of Finance Shaun Bond told Yahoo Finance build-to-rent could have a 'big impact' on the landscape of Australian housing over the coming years and was 'key' to taking some pressure off the market. RELATED Growing property tactic that allowed 25-year-old to buy first Sydney home Centrelink age pension changes coming into effect from July 1 $1,000 ATO school fees tax deduction that Aussies don't realise they can claim 'The key problem we have in Australia is we just haven't been building enough homes. This is a critical problem that was severely exacerbated during Covid when all the supply chains shut down and we've seen a big increase in material costs and a lot of building companies went out of business,' he said. NSW Treasurer Daniel Mookhey said the measures announced would give developers the certainty they needed to build more homes faster. 'We are making sure we build the homes we need, along with the essential infrastructure we need to go with them,' he said. 'Extending the tax incentives for build-to-rent will make it easier for developers to build, and give renters more choice.' Property Council NSW executive director Katie Stevenson welcomed the measures and said there was no time to waste, given we are still falling short of the government's goal of building 1.2 million homes by 2029. 'Making the BTR exemption permanent provides long-term certainty to investors and developers, helping to enable more high-quality rental homes to be delivered across NSW,' she said. To be eligible for the tax concession, a building must be owned by a single owner and manager and include at least 50 rental dwellings. Build-to-rent is an established practice in the UK and USA, but it is still a fairly new concept in Australia. Residential apartments are usually built by developers, with units sold off one by one. With build-to-rent, the units are designed specifically for renters and are held in a single ownership and professionally managed. They usually build a large number of units, with some having 200 or 300 units. They may offer longer-term lease options, better security for tenants and more rental housing choices in areas people want to live. Investors are pouring billions into the sector, with more than 8,900 dedicated build-to-rent apartments under construction in Australia at the end of last year and a further 20,000 units approved for development over the next five years. Other states like Victoria also have a 50 per cent land tax discount in place to encourage build-to-rent properties. Bond said one of the advantages of build-to-rent was that it helped bring supply on more quickly. 'You have maybe a large pension fund or institutional investor who might be able to provide large amounts of capital, because you could need $100 million or more for a big new development, and they can make that decision pretty quickly to go ahead,' he told Yahoo Finance. 'Because they have the resources, they can team up with a big developer and bring that property online. 'Whereas the traditional model in Australia has mainly been a developer will propose a new development, and then they'll have to do pre-sales, so it might take you two years to get the 60 or 70 per cent pre-sales you need to start construction.' Build-to-rent properties can also have a bigger focus on lifestyle factors for tenants. 'They'll really focus on the amenities that they offer to a tenant, because they want the tenants to stay there and be happy,' Bond said.
News.com.au
4 days ago
- Business
- News.com.au
How Melbourne renters will live like millionaires inside $1bn tower
A record-breaking new skyscraper in the heart of Melbourne is flipping the great Australian dream on its head, offering renters rooftop bars, private cinemas, co-working suites, pet spas and even a bowling alley. But while the 45-storey West Tower will deliver a lifestyle most buyers can only dream of, it's part of a growing shift in Melbourne's housing market, one that could see more people choosing not to own at all. Set to welcome its first residents in early 2026, the $1bn build-to-rent development is now the largest single build-to-rent tower in the country, with 797 apartments exclusively for lease, not sale. Located at 899 Collins St, Docklands, the Lendlease and Daiwa House project will feature a concierge, 25-metre lap pool, cinema, rooftop gardens and sweeping bay and city views, all within walking distance of the CBD. Daiwa House Australia chief executive Koji Morishige said the project aimed to raise the bar for rental housing. 'Everyone deserves a place they can call home, with everything a home can and should offer,' Mr Morishige said. Lendlease Development chief executive Tom Mackellar said long-term BTR developments like West Tower were not just lifestyle-driven, they were also about meeting demand. 'Long-term rentals provide much-needed housing supply and diversity,' Mr Mackellar said. 'They give people more choice at different stages of life.' The announcement comes amid renewed debate over the future of housing in Victoria, where house prices and rental costs remain near record highs. While some see institutional landlords as a threat to affordability, others argue they could offer much-needed consistency and quality in a system currently dominated by mum-and-dad investors. Interim REIV president Jacob Caine said large-scale build-to-rent projects would become a bigger part of Melbourne's housing mix, especially as traditional rental stock came under pressure. 'Build-to-rent is going to play a major role in Melbourne's housing future, and the announcement of a project of this scale is a huge vote of confidence in that model,' Mr Caine said. 'We need more homes of all kinds, whether that's rentals, first-home buyer listings, family homes, or downsizer-friendly options. 'Build-to-rent is one piece of the puzzle, but it's an increasingly important one.' Mr Caine said the growth of build-to-rent could help relieve pressure on renters by adding more listings to the market and offering longer leases with clearer standards of management. 'The more choice there is in the market, the more pressure we can take off prices and the greater the opportunity for Victorians to find housing that suits their needs,' he said. West Tower is part of a broader pipeline of 2800 apartments being developed by Lendlease across Melbourne and Brisbane. Its location within the Melbourne Quarter precinct means residents will also have direct access to the recently opened Quarterhouse pub and rooftop bar, and elevated green space via the city's first 'Sky Park'. And while it won't solve the housing crisis alone, industry leaders believe it's a glimpse into how future generations will live, with luxury amenities and no mortgage.
