Are Build-to-rent housing projects the solution to Australia’s housing crisis? Developers Build To Rent Co. certainly think so, lodging an application Sydney’s largest-ever build-to-rent development with the state government.

$1.5 billion project will be located in Marrickville in Sydney’s inner west on an old timber yards site. The development would feature over 1,200 rental units, including 115 affordable homes.

If approved, the 2.2-hectare industrial site would be transformed into a development with seven apartment towers and public outdoor space. The project will also include retail and creative spaces, providing amenities for residents and the wider community. Fully funded, the project can commence construction as soon as approval is received from the NSW government.

According to the developers, the project will inject much needed affordable housing supply into Australia’s largest city.

The proposed development has put the rise of build-to-rent developments in the spotlight.

So, what is rent-to build and is it the solution to addressing Australia’s housing crisis?

What is rent-to-build and what are the benefits?

Under a rent-to-build model, the developer owns and leases the units on an ongoing basis. The model is proving increasingly popular. Up to half of all new apartments built in Melbourne over the next three years are expected to be part of rent-to-build developments

The model can provide several advantages including:

• Increased incentive for developers: A rent to build model offers developers a stronger incentive to consider a project’s long-term impacts.
• More affordable housing: It also provides a viable option for families who can’t afford to purchase housing in the inner city. By increasing housing supply, build-to-rent developments can also help prevent rents from rising.
• Greater security: Build-to-rent developments offer the possibility of a long-term secure lease. Therefore, as long as tenants continue paying rent, they will not be evicted by their landlord on a whim.
• Help address housing supply: It has been well-documented that Australia is currently experiencing a severe shortage of housing. According to analysts, build-to-rent developments could contribute a substantial amount of much-needed housing. Unlike other developments, build-to-rent projects don’t need pre-sales to secure funding. This allows them to deliver housing supply faster. Advocates say build-to-rent projects could be delivered even faster if taxes on foreign investors were reduced.
• Delivering compact housing: Few one-bedroom apartments have been delivered in the past decade, due to limited price growth and stringent lending requirements. Build-to-rent developments are well-placed to help address this trend.

Are there any downsides?

Experts warn that while build-to-rent developments can have many benefits, they do not always provide the affordable housing options many believe. International research suggests that rent-to-build developments are often categorised as premium products. Typically, they will offer additional services to tenants. As a result, they are marketed to people with higher incomes. Some build-to-rent developments include affordable housing provisions. However, on average, they cost 26 per cent more than 75% of the rental market. Therefore, while they may prove a cheaper option then purchasing a home, they are still not an affordable option for many people.

Experts warn that while they may help increase supply, build-to-rent projects are not the sole solution to Australia’s housing crisis.

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Article References

Lenaghan, N (October 24 2024) ‘Giant $1.5b build-to-rent housing project slated for Marrickville’, Financial Review, accessed 4 March 2025.

Sweeney, N (18 September 2024) ‘Build-to-rent units to dominate this major city in three years’, Financial Review, accessed 4 March 2025

Tarak-Goodwin, S (17 February 2025) ‘Plans for NSW’s largest ever build-to-rent project in Sydney’s inner west lodged with government’, ABC News, accessed 4 March 2025.