Build to Rent Rising

Build to Rent Rising

Build-to-Rent projects are becoming increasingly popular, with almost 30,000 apartments proposed or under construction.

Analysis by advisory firm BDO shows the value of the market has grown by almost $9 billion or 40% in the past 12 months.

It says there are almost 30,000 build-to-rent apartments proposed or under construction nationally as of the second quarter of 2025.

Development of build-to-rent projects is particularly concentrated on the East Coast, with Victoria leading the charge with 12,396 apartments either under construction or planned.

New South Wales has 10,758 and Queensland, 3886. Western Australia has 535, the ACT, 305 and South Australia, 240.

BDO’s Luke Mackintosh says Build-to-Rent has emerged as a core strategy for investors seeking stable, long-term returns, in a market increasingly defined by housing undersupply and evolving lifestyle preferences.

“As the lines blur between traditional commercial and residential investment, the living sector is no longer a side bet - it’s a central pillar of the future real estate landscape,” he says.

Axing Airbnb Won't Free Up Rentals

Placing restrictions on short-term rentals is unlikely to free up properties for long-term tenants, according to a survey of Airbnb hosts.

The majority, 88%, say they won’t offer their homes to the long-term rental market even if stronger restrictions are introduced. About half of respondents say they will leave the property empty rather than offer it for long-term rental, according to a survey by YouGov.

About two-thirds of respondents believe their property can’t transition from a short-term rental into a long-term rental. This is because it is used as either a primary residence, secondary residence, holiday home, or it is not suitable for long-term rental.

Only 12% of Australian Airbnb hosts surveyed say they are likely to put their home on the long-term rental market if restrictions are placed on how often a property can be offered for short-term lease. Analysis of Victoria’s 7.5% levy on those who offer their properties for short-term letting, shows there has been no improvement in vacancy rates for long-term letting as a result.

Airbnb properties account for about 2% of Australia’s dwellings.

Land Sales Drop

As the cost of construction continues to rise, land sales have hit the lowest level in 25 years.

The HIA-Totality Residential Land Report shows there were just 8,250 lots sold nationally in the March Quarter 2025.

It says this coincides with the median price of residential land reaching a new high of $372,620 in the first quarter of the year.

HIA senior economist Tom Devitt says the cost of construction has risen by nearly 40% since 2019.

“From already weak levels, this deterioration in sales volumes, coinciding with record high lot prices, points to a worsening shortage of shovel-ready land across the country,” he says.

With less land being sold and fewer homes being developed, this will drive up demand and therefore the cost of established homes, according to Devitt.

He says of the big add-on costs when building is planning approval delays, which cost almost $20,000 and can take more than six months to secure.

QUOTE OF THE WEEK 

Loan Market Group CEO, Ewen Stafford.

"This isn’t just a short-term bounce. It’s a sign that Australians are adapting to a new lending environment where affordability, confidence and strategy are beginning to find balance again.”

Rates Don't Rate a Mention

Despite what some parts of the media may have us believe, interest rates are not a major influence on whether people buy or sell. A survey by InfoTrack shows that buyers and sellers are more focused on affordability.

It says 45% of buyers and sellers say it is not a consideration for them at all and only about 5% of respondents held off buying or selling based on the current interest rate.

InfoTrack head of property Australia, Lee Bailie, says the findings challenge the idea that interest rates are stopping people from buying or selling.

Almost a third of those surveyed say property prices are the biggest challenge in the housing market and two-thirds of respondents say price determined where they bought property.

The Reserve Bank of Australia cut rates in August by 25 basis points to 3.6% it is the third interest rate cut in 2025. Interest rates were 4.35% at the start of the year.

Where FHBs Are Buying

First home buyer activity is heating up with new entrants to the market rising.

Data from Loan Market Group shows the number of new entrants into the property market rose by 36% in June compared to the same time last year. Victoria, in particular, had had a spike in first-time buyers, according to LMG’s Ewen Stafford.

"This isn’t just a short-term bounce. It’s a sign that Australians are adapting to a new lending environment where affordability, confidence and strategy are beginning to find balance again,” he says.

First-home buyers now account for 13% of all new mortgage approvals (excluding refinancing). The data shows the regions with the highest number of first-time buyers with mortgage applications by dollar value are Melbourne’s eastern, inner and western suburbs, as well as Greater Brisbane, Coastal Sydney and Greater Western Sydney.

Mortgage approvals overall, not just first home buyers, are up by 5% in June.