by Sanjeev Sah | Apr 30, 2024 | Market Updates

Australia’s housing supply crisis has seen rents soar while vacancy rates plummet – see image.  

In response, the federal government plans to build 1.2 million new homes over the next five years, starting from 1 July 2024.   

Part of this strategy includes promoting the construction of rental housing by offering tax incentives for investments in the build-to-rent (BTR) sector.  

BTR developments are designed exclusively for renting, not for sale to individual buyers. 

However, the Real Estate Institute of Australia (REIA) has warned that BTR is an “inefficient solution” to the housing crisis. 

REIA president Ms Leanne Pilkington said that BTR developments currently account for just 3,800 completed units, significantly below the Budget 2023 projections of  “up to 150,000 units of supply being unlocked” by the sector. 

“BTR will take time to come online and our shortages are now,” she said. 

“While projections suggest an expansion of the BTR pipeline in the coming years, it’s evident that private residential investors will continue to dominate the rental market landscape for the foreseeable future.”