Build-to-rent ‘insufficient’ in addressing housing supply: REIA

According to the Real Estate Institute of Australia’s latest Build-to-Rent Report, the federal government’s build-to-rent (BTR) initiatives are set to fall “well short” of the budget 2023 projections.

REIA president Leanne Pilkington said the report delivered “mixed results” for the outlook of the topical asset class.

“BTR currently only accounts for 3,800 completed units and of the 44,139 combined BTR units
proposed, only 43 per cent have approval,” she said.

“A whopping 55 per cent are planned for Melbourne while the bulk of BTR pipeline will be owned and managed by foreign investors.

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

According to Pilkington, the budget 2023 factored up to 150,000 units of supply being unlocked by the BTR sector.

“Our market analysis shows very clearly that the current pipeline will not touch the sides of this ambitious supply statement, which is more than 10 per cent of the 1.2 million homes target,” Pilkington said.

Housing supply concerns continue to be front of mind for many as Australia’s property organisations have vocalised their concerns to the Albanese government.

The latest Building Approvals data released by the Australian Bureau of Statistics (ABS) revealed another drop in total dwellings approved during February, following a 2.5 per cent decline in January.

Housing Industry Association (HIA) senior economist Tom Devitt said detached housing approvals over the last three months are still down by 3.3 per cent on the same quarter last year and 37.9 per cent down from the peak three years ago.

“The bounce back in detached house approvals from January disguises the continuing weakness in Australia’s housing market,” Devitt said.

Lending stats hiding ‘true nature’ of the market

Pilkington also commented on the ABS’ Lending Indicators data released yesterday (8 April), which revealed a rebound in the value of new mortgage lending during February.

She stated that the increase came off “an extremely low base”.

“The latest stats show the response of private investors to higher rents and anticipated cuts in interest rates. Private investors continue to be part of the solution not the problem,” Pilkington said.

Pilkington added that the result “do not reflect the true nature” of what is actually occurring in the Australian marketplace.

Housing affordability continues to be at a “crisis point” as housing supply continues to be “obliterated” and housing and unit rental and capital prices across the nation skyrocket, according to Pilkington.

[RELATED: Dwelling approvals data shows ongoing signs of weakness]