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An expert has pointed out that the NSW build-to-rent scheme, aimed to ease housing pressures, will be ineffective, overpriced, and missing the core issue of overregulation.
The build-to-rent (BTR) initiative is set to allow for the development of large-scale, purpose-built rental housing units to be held in single ownership. So far, the NSW government has introduced a planning pathway for the BTR scheme, which aims to address housing supply and affordability constraints.
In 2023, the Labor government allocated $60 million to support build-to-rent trials across the NSW South Coast and Northern Rivers regions.
While this initiative has been welcomed by property industry professionals, Home Loan Experts senior mortgage broker, Jonathan Preston, is unconvinced of the scheme’s efficacy as a solution for affordability and supply, labelling BTR as “a joke”.
“I believe the solution is to allow for the construction of smaller apartments. In Asia, units of 27–30 square metres are standard for one-bedrooms. They make 1,000–2,000 units per building,” Preston said.
“All of this ‘build-to-rent’ is a joke. We could solve housing affordability in a day if we just cut out the last 10 years of regulations: unlimited height ratios, no minimum square metre internals. Turn it into cage housing like Hong Kong. It’s the regulation, that’s the issue.”
One program introduced through BTR is the LIV project by Mirvac. According to the property group, LIV has secured five properties in its seed portfolio (located in Sydney Olympic Park, Queen Victoria Market, North Wharf, and Newstead), which are reportedly set to deliver around 2,200 apartments.
However, Preston believes this is also an ineffective solution to the country’s housing woes.
"The LIV project is a joke as well – it’s insanely expensive. Sure, they say they have a 5,000 pipeline, but look at these prices. They’re double Melbourne’s. Rents start from $620 a week for studio apartments and from $1,300 a week for three-bedroom units,” Preston said.
“Rent increases – for residents taking out three-year leases – are set at a minimum of 4 per cent or the greater of CPI inflation or Melbourne’s rental price index. It’s ensuring rents rise at the fastest rate possible.
“$620 for a studio is double that of a share house room as well. I mean, yes, more supply is good, but we’re building the wrong supply.
“Too little too late, a drop in the bucket. The apartments will be new and expensive and won’t dent affordability really, in my opinion.”
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