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Pandemic Accelerates The Shift Towards Build To Rent

Traditionally, residential developments showcases a build to sell mentality, meaning that the developments are sold off unit by unit individually. Due to the pandemic, however, there has been an apparent transition into Build to Rent developments, which retains the ownership of the entire project with the developers and investors as they rent the units instead of selling them.

Given that this is currently the primary nature of the residential market across countries like the UK and the USA, it is apparent that Australia is following suit with data indicating that the number of rental households in Australia has risen by half a million in the last decade, which matches the decline in home ownership of 30% throughout the last twenty years.


Given that the construction industry employs one in every ten Australians, the pandemic has undoubtedly taken its toll on the national construction sector, in which two thirds of businesses have seen projects delayed or cancelled throughout the pandemic and a quarter have had to lay off workers.

While COVID has seemingly thrown the world into a stand still, the government intervention to stimulate economic activity has accelerated the rate in which we are building to rent. Given the coming recession post-pandemic and the financial instability that is due to affect Australia, there is a necessity to provide affordable housing options and this necessity is expediting the manner in which these developments are moving.


Traditional off the plan building developments utilise a slower process as they are dependent on pre-sales and accumulating the initial investment before commencing construction, the move toward build to rent mitigates this approval process and therefore encourages a growth in jobs as well as activity in a quicker timeline.


Another significant impact of the build to rent adaption to the housing market are the long term effects of revitalising communities and reinventing a community lifestyle, with a growth in mixed-use precincts, communal amenities and shared spaces. With developments preferring to offer longer-term leases than the traditional period of less than two years, this longevity offers consistent returns on the property as well as stability over the years.

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