Build-to-RentLindsay SaundersMon 04 May 26
Sydney Snatches Melbourne’s Crown as BtR Leader
Australia’s build-to-rent sector has a new leader, fresh data has revealed.
The sector is entering a new phase of maturity, the report from BDO Australia said, pointing to a shift in leadership, capital flows and development patterns across the country.
It said the sector remained underpinned by strong demand but is now being reshaped by policy settings, institutional recognition and operational scale.
The national pipeline has surged to about 51,000 apartments with an estimated value of $40.1 billion, marking a rapid increase from 39,300 apartments and $30.1 billion a year earlier.
This expansion reflected a broader transition from a nascent concept to a fully functioning, income-producing asset class attracting global capital, the report said.
New South Wales has emerged as the dominant growth market, overtaking Victoria for the first time as planning reforms and tax settings draw institutional investment.
Victoria, while still the largest market by total pipeline, is experiencing slower new commencements as tax and regulatory uncertainty weigh on project feasibility.
The report identified this divergence as a critical inflection point, with Sydney rapidly closing the gap on Melbourne and reshaping national delivery patterns.
Other markets including Queensland continued to attract selective expansion, although high construction costs and labour pressures remain constraints.
Operational scale is also accelerating, with completed build-to-rent apartments forecast to grow from about 9000 in 2024 to more than 46,000 by 2029.
Annual completions are expected to almost double over the same period, rising from about 5000 to nearly 9800 apartments.
Despite this growth, the sector remains a small share of Australia’s overall housing stock —about 0.3 per cent—underscoring both its early stage of growth and long-term potential.
Institutional investors are increasingly backing large-scale platforms, with a growing focus on operational performance, tenant experience and long-term returns.
The report highlighted that around 80 per cent of surveyed platforms expect their next project to be in New South Wales, reinforcing the shift in geographic focus.
However, policy remains a decisive factor in determining the sector’s trajectory, particularly around tax treatment and regulatory alignment with other asset classes.
Industry participants point to GST settings and foreign purchaser surcharges as key barriers that continue to add cost and deter capital.
The report argues that resolving these issues could unlock further institutional investment and accelerate delivery at scale.
Looking ahead, the sector could expand to as many as 350,000 apartments over the next decade if supportive policy settings are maintained.
The findings position build-to-rent as a growing pillar of Australia’s housing system, offering professionally managed rental housing in a market defined by undersupply and rising demand.
