New South Wales Treasurer, Dominique Perrottet has given his strongest indicator so far that build-to-rent options are being actively explored by the New South Wales Government to help curb the current housing affordability crisis in New South Wales, with the announcement of the establishment of a couple of working groups with industry, to look into the issue.
Build-to-rent is where one institutional investor owns the entire apartment building for the sole purpose of long term renting, which is already an established and popular option in the US and the UK.
“Build-to rent is a concept that has been successfully implemented in Europe and the US, and there is no reason why it can’t make up part of the property sector in NSW” he said recently while discussing the issue.
“This makes renting an attractive option, and long-term renting presents distinct challenges in the areas of affordability and certainty.”
A raft of changes to support any build to rent projects are needed at the state and federal level including planning and tax incentives for the developers and any possible law changes to protect tenant rights.
Why are we so keen to read about planning policy changes? Changes to codes always bring new opportunities in the property market, new housing styles become available and allow innovation which can provide extraordinary returns and advantages for the savvy investor.
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At the same time NSW investigates it’s build-to-rent options, the Victorian Government is pushing to make, in their words, “renting fair” by announcing their plan to introduce a rental fairness package. The package includes allowing tenants to stay on longer leases, making a cap on smaller bonds, a crackdown on rental bidding (where would-be tenants are asked to outbid each other on the rent) and will limit rent increases to once a year, which is currently every six-months.
Under the plan, tenants will be allowed to request to keep pets and make some minor modifications. Landlords will also need a reason to end a tenancy when the lease has lasted more than one fixed term, thereby scrapping the current 120 day no specified reason, notice to vacate.
The premier said in a prepared statement, “Everyone deserves the chance to have a safe, secure and affordable home – whether you own it or not.”
With more than one in four Victorians now renting, these proposed changes go a long way in shifting the balance of power back into the renters’ hands, while at the same time, it sends a message to larger institutional investors looking to create build-to-rent properties that Victoria also appears to be heading down the same road as NSW, in actively considering their build-to-rent options.
All the best on your investing journey.
CEO – Plan Assist Property Team