As featured in Green Street News
19 March 2025
Easier access to bank finance and favourable tax changes will support a pick-up in activity over longer term
- What A record 5040 BTR units were delivered last year, but future supply has shrunk
- Why Some BTR sites have been converted to other uses
- What next The market is expected to pick up again as foreign investors eye opportunities
Build-to-rent developers delivered a record 5040 apartments in 2024 including big Melbourne projects by US giant Greystar and Daniel Grollo’s GIC-backed Home, but the future supply of projects has shrunk, according to Charter Keck Cramer.
Melbourne led the national market with 3135 BTR units delivered last year, up from just 576 in 2023, well ahead of Sydney (1280) and Brisbane (320), according to the consultancy and valuation firm’s latest State of the Apartment Market report.
CKC counted 8630 BTR units under construction nationally, with the bulk of these projects in Melbourne (nearly 6000 units) followed by Brisbane (1950) and Sydney (560).
Just 2649 BTR apartments are due to be completed in Melbourne this year, with almost 3500 due to be finished in 2026, more than 5000 in 2027 and 3500 in 2028.
Subject to financing being secured, Sydney could deliver around 2200 units between now and 2028, while more than 9000 could be delivered in Brisbane over the same four-year period.
“Overall, the supply of BTR has shrunk over the last 12 months,” said CKC national director of research Richard Temlett.
“[This is because some] sites have either flipped back to build-to-sell or been repurposed for student accommodation,” he said.
Despite the shrinkage in future supply, Temlett said the long-term outlook for BTR was bullish, with major banks “coming to the table” on the debt financing side.
“BTR operators are saying it is not at all hard to get debt finance from the Big Four banks,” he said.
While equity capital remains very hard to raise, Temlett said the reduction in the withholding tax rate governing managed investment trusts to 15% (for eligible schemes) had been a “a real shot in the arm” for foreign investors, in particular those from Japan.
In addition, further rate cuts would make the returns offered from BTR look “a lot more favourable”
“I believe a lot more capital will come into the market,” he said.
Eight BTR projects in Melbourne were completed last year, with the sector fairing a lot better than the Melbourne build-to-sell market, which had its worst year in two decades, according to CKC.
