Fuseworks Media

‘Build to Rent housing surges forward with nearly 3,400 homes in pipeline’

Key points:

– According to research conducted by Property Council New Zealand, as of 31 December 2023 there have been 1,307 Build to Rent homes delivered across New Zealand.

– There are 850 Build to Rent homes under construction and a further 3,395 in the development pipeline.

– Auckland is currently leading the way with 1,096 units completed, a further 742 under construction and 3,350 in the development pipeline.

– The main legislative hurdles to greater investment in Build to Rent are the Overseas Investment Act and depreciation settings.

– Property Council New Zealand will be tracking the progress of Build to Rent development around the country on a quarterly basis via https://www.buildtorentnz.co.nz/where-is-btr

Today’s launch of a dedicated Build to Rent (BTR) tracker, designed to track the quarterly progress of BTR projects, marks the first time we’re able to benchmark and measure the status of this exciting new housing model, says Property Council New Zealand chief executive Leonie Freeman.

Produced in collaboration with JLL, Colliers, Savills, CBRE and Bayleys, the purpose of the tracker is to highlight the opportunity of Build to Rent in providing quality, long-term rentals for Kiwis across New Zealand.

As of 31 December 2023, there are 850 Build to Rent homes under construction across Aotearoa, with a further 3,395 in the development pipeline. Meanwhile, 1,307 Build to Rent homes have been delivered.

“While Auckland is certainly leading the way with 1,096 units completed, a further 742 under construction and 3,350 in the development pipeline, we see huge opportunity for Build to Rent to help alleviate the pressure on rental markets in places like Queenstown, Wellington and Tauranga”, says Freeman.

“Build to Rent not only has the potential to deliver significant new housing supply in our cities, it has the potential to transform smaller centres where tight rental markets have made finding a home – particularly one that offers options for long-term occupancy – very difficult for renters.

“In Australia and the United Kingdom, Build to Rent is the fastest growing type of residential accommodation. We know there is an appetite for similar growth and investment here, however, potential overseas investors are currently being hampered by restrictive and uncertain regulations. Getting these settings right is critical to enabling growth in the Build to Rent sector.

“From a legislative standpoint, we believe we are more than halfway to truly unlocking Build to Rent in Aotearoa. Last term saw the establishment of an asset class and the restoration of interest deductibility. The new government has recently honoured their commitment to introduce

amendments to the Overseas Investment Act into Parliament as soon as possible. Alongside this, access to depreciation for Build to Rent properties and ensuring the Residential Tenancies Act is fit-for-purpose remain crucial.

“This combination of legislative levers will help fuel new housing supply, giving Kiwi renters far greater choice and security of tenure.

“At the end of the day, it’s all about certainty. The more certainty we can give potential investors, the more likely they are to invest in Build to Rent in New Zealand, and the more housing options renters will have. This goes for both overseas investors and hardworking Kiwis whose KiwiSaver funds are invested in the sector – it really is a win-win-win situation”, says Freeman.

“Back in 2021, our modelling suggested that with the correct settings in place, Property Council’s members could deliver up to 25,000 new homes over a decade. The best time to do something was yesterday, the second-best time to act is today”.

 

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