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“We want to grow our BTR portfolio in the medium term, and play a key role in helping address the housing and rental shortfall in Australia,” he said.
“Creating communities is what we do best, and to be able to provide more quality rental accommodation is all the more important with the backdrop of the housing supply crisis”.
Mirvac BTR sector lead Angela Buckley said three years of operating LIV Indigo, its first BTR development in Sydney, plus 12 months at LIV Munro, in Melbourne, has given it invaluable insights on future offerings to renters.
“Today, we have more than 1200 BTR customers, and this will triple within the portfolio, so we are continuously learning and refining to deliver the best living experience for our residents,” she said.
There are an estimated 8350 dedicated BTR apartments under construction nationally as of September 2023, and a further 12,900 units are approved for development in the near-term, according to the Knight Frank Breaking the Shackles – the rise of BTR report.
The research found that among the major cities, Melbourne is by far leading the charge for BTR developments, with 4920 apartments under construction and another 8250 approved. Mirvac alone has a Victorian development pipeline of $9.1 billion.
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More than 55,000 dedicated BTR units are expected to be completed nationally by 2030.
“A wave of construction activity is now underway, with the pipeline most advanced in Melbourne and Brisbane, but activity is picking up across all major cities,” said Knight Frank chief economist and report author Ben Burston.
He said the acceleration of BTR development mirrors the beginning of the growth phase that occurred in the UK from 2015 onwards. “Over the following eight years to 2023, UK stock expanded from 11,312 to 82,636 units, reflecting average growth of 30 per cent per year,” Burston said.
The rollout of more BTR apartments is much-needed. Treasurer Jim Chalmers’ May budget forecast an extra 1.5 million migrants over the next five years, including a record 400,000 in 2022-23 and 315,000 in 2023-24.
The burgeoning numbers will add more pressure on already skyrocketing rents and record-low vacancy rates, with new demand easily outstripping the supply of new rental properties.
CBRE forecasts the number of apartments to grow by 60,000 in 2024 – well short of the 75,000 needed to avoid any further falls in the vacancy rate. Even with 55,000 dedicated BTR units expected to be completed nationally by 2030, they would still represent just 1.5 per cent of the total rental supply, leaving a major shortage in capital cities.
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