Thousands of new rental apartments have hit the market in recent months, as Build-to-Rent (BTR) operators open their doors and add desperately needed housing supply across the country.
It’s been a record year for Australia’s emerging BTR sector, with more than 5,000 rental apartments opening their doors to renters so far this year.
The influx of purpose-built rental housing comes as the national rental vacancy rate sat at just 1.36% in October, well below the 2-3% average seen in normal times.
The rental shortage has jacked up the cost of renting for tenants too, with the Australian median weekly rent rising 7% over the year to September to $610, according to PropTrack.
Nearly 480 rental apartments have officially opened in Melbourne’s inner north this week, as BTR operator Local Residential opened its $380 million development in Kensington, Melbourne.
Local Residential founder and co-chief executive Dan McLennan said early leasing had been very positive, with more than a third of the first stage already leased and the second stage just completed.
![](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 800 450"%3E%3C/svg%3E)
Local Residential’s new Kensington project has 477 rental apartments. Picture: Supplied
“Renters are impressed by the size and quality of the apartments and, more so, what’s included in their rent as standard, such as whitegoods and amenities like the gym that they’d normally be paying upwards of $60 a month elsewhere,” he said.
Macquarie Asset Management has backed the Local Residential business, while NAB has financed the Kensington project.
Macquarie Asset Management head of real estate Asia Pacific James Kemp said communities were looking for housing solutions that met their lifestyle demands.
The new Local Kensington project has a gym, swimming pool, yoga studio and other amenities. Picture: Supplied
“At the same time, the market is responding favourably to an institutionally managed residential product,” he said.
NAB Group chief executive Andrew Irvine said the bank was one of the largest financiers of scalable BTR projects in the country.
“Through this work, NAB is on track to deliver $6 billion to support access to more affordable housing by 2029,” he said.
Greystar’s new Gladstone project in South Melbourne has opened the doors to its 700 rental apartments. Picture: Supplied
Beyond the Kensington project, a further 700 rental apartments became available to renters last month when Greystar opened its $500 million BTR project in South Melbourne.
Nearly 670 new renter-only apartments opened at Home’s new Docklands building in Melbourne in October, and Mirvac opened 474 renter-only apartments in the Melbourne CBD in August.
At least 20 BTR buildings comprising more than 5,300 rental apartments have been completed and opened their doors across the country so far this year, according to property consultant Charter Keck Cramer.
Melbourne has had the lion’s share of new rental apartments come online, followed by Sydney, Brisbane and Canberra.
Charter Keck Cramer national executive director Richard Temlett said it had been a bumper year for the BTR sector.
“It’s been a record year for Build-to-Rent with projects being delivered and renters starting to occupy them,” he said.
Mirvac’s Liv Aston building, which opened in August, has 474 renter-only apartments in the Melbourne CBD. Picture: Supplied
“The rental market desperately needs supply and having spoken with different BTR operators, there’s been a huge amount of interest and enquiry from renters looking at BTR apartments.
“They are getting good levels of enquiry and they are also leasing up faster than they were expecting given that it’s still a bit of an unknown.”
The string of openings come as the federal government secured its long-touted tax changes last month to incentivise foreign investors to construct more BTR apartments in Australia.
Greystar’s Gladstone property has good big on outdoor amenities. Picture: Supplied
The law changes were estimated to deliver 80,000 new rental homes over the next 10 years.
BTR developers, operators and lenders have welcomed the move and hope that it will attract more overseas capital into the fledgling sector.
“Developers and financiers have told me that this change is a positive shot in the arm for confidence and will send a signal that Australia is open for business,” Mr Temlett said.
Mr McLennan agreed, noting that there had been plenty of investors waiting on the sidelines for these tax changes.
“With this barrier down, I’m very confident that we’re now going to see significant additional interest in the sector and we’re very excited as a business for what it means, not just for ourselves, but for the sector,” he said.
In Australia, Charter Keck Cramer estimated more than 10,000 BTR apartments were completed; over 8,000 were under construction; and more than 21,000 had planning approval.
