18 October 2022

First Build-to-Rent release to inject 270 units into inner north

| Ian Bushnell
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Build to rent site in Turner

The Build to Rent site in Turner was chosen due to its proximity to light rail and the City Centre. Photo: ACT Government.

The ACT Government has released its first block of land dedicated to a Build-to-Rent (BTR) housing project as part of its bid to boost the number of rental properties in the Territory.

The 7070 square metre site in Turner (Block 3 Section 57) is being sold by the Suburban Land Agency (SLA) via a tender process, and has a minimum dwelling requirement of 270 units, with at least 15 per cent required to be affordable rentals to eligible tenants.

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The site on Northbourne Avenue was chosen due to its proximity to light rail and the City Centre.

Under the BTR model, a development is purpose-built to provide rental accommodation that can be long-term and secure.

It is increasingly popular overseas and is seen as a remedy to the insecurity of Australia’s rental market and meeting the demand from the growing number of people who choose to rent or who cannot buy their own property.

The purchaser of the Turner site will enjoy tax benefits such as no unit titling of the individual dwellings through substantially reduced land tax and general rates.

Chief Minister Andrew Barr said the BTR project in Turner would help improve housing choice and affordability in Canberra, where rents are the highest in the country and vacancy rates are low.

“We want to see more Build-to-Rent projects in the ACT, and the ACT Government will be pursuing private investment into these projects over the coming years,” he said.

Minister for Housing and Suburban Development Yvette Berry said the Build-to-Rent model would help improve rental supply and affordability with longer term security for tenants.

“Homes will be specifically designed to meet renters’ needs, will increase housing choice as well as diversity across our city,” she said.

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“This project complements other housing initiatives outlined in the 2022-23 ACT Budget and delivers a key action under the ACT Housing Strategy.”

The Government has been investigating the BTR option, commissioning a feasibility study and testing the market.

Colliers and JLL have been appointed to run the sale by tender.

Colliers director land marketing, Josh Reid said that while not seen in the ACT before the site should be highly attractive to investors.

“As a BTR site, the homes built on this site cannot be unit titled for a period of 19 years,” he said. “Fifteen per cent of the dwellings also have to be offered at affordable rent, which is less than 75 per cent of market rent.

“While not something we have seen in the ACT before, this site should be highly attractive to investors. There are also significant tax benefits for developers to undertake BTR and a subsidy to improve rental affordability.”

The tender process closes on 15 December 2022.

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Private for-profit housing you can’t buy for well connected rich investors – welcome to neo-feudalism serfs. The more you give rent seekers, the more they will want. Expect the other 85% of rentals to be anything but affordable despite the tax breaks and subsidies.

I like the idea of this in principle, but surely we could do better than 15% at affordable rent.

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