Industry leaders warn move could threaten 80,000 new rental homes
The federal Coalition’s plan to block regulations supporting foreign investment in build-to-rent housing has drawn strong criticism from industry groups and sector leaders, who warn the move could undermine efforts to address Australia’s housing supply crisis.
The Coalition recently announced it would seek to overturn regulations backing the government’s build-to-rent program, which passed the Senate in the final sitting of the last Parliament. The Property Council of Australia has urged the Coalition to reconsider, highlighting that the regulations are expected to enable the construction of 80,000 new rental homes, including 8,000 affordable units, at a time when housing affordability remains a pressing issue.
According to Tom Forrest (pictured left), chief executive officer at Urban Taskforce, the push to disallow these measures reflected outdated housing policies. “This is a throw-back to the failed housing policies of the Dutton leadership and should be ignored,” he said.
“In the middle of a housing supply crisis, the country needs to be firing on all cylinders, not opposing initiatives that would deliver an important housing stream across the nation.”
Build-to-rent housing, which offers high-quality, secure, long-term rentals in well-located areas, is widely adopted in countries with comparable economies. The model is gaining traction in Australia, supported by institutional investors such as superannuation and pension funds, and is seen as a key part of the solution to the current supply and affordability challenges.
Mike Zorbas (pictured right), chief executive of the Property Council of Australia, said the current Parliament has a responsibility to prioritise the supply of new homes for both renters and buyers after decades of inaction. “This is wrecking ball policy,” he said. “The main game, the only game in Australia right now, should be the rapid supply of new housing. We need to make owning a home as easy as we can. Equally, people need different housing choices throughout the stages of their lives.”
Zorbas pointed out that the median age of first-home buyers in Sydney is now approaching 37, underscoring the urgent need for additional rental homes. He added that Australia is building homes at half the rate seen in 1995 and is falling 70,000 homes a year short of its targets.
“Australians expect the Parliament to pull every supply lever we can to make homes less expensive for people who need to buy or rent,” he said. “Threatening to knock out 80,000 new rental homes will directly raise the cost of new homes for everyone in the market.”
He called for a shift in focus to policies that address infrastructure bottlenecks, remove state taxes that burden new buyers, and improve planning systems. “At a time of historic state debt, every private sector dollar must be put to work,” Zorbas said.
“Patient institutional investment will put downward pressure on the cost of the 30% of housing stock that makes up the rental market. Achieving the nation’s welcome 1.2 million new home target depends on all parliamentarians backing policies that boost housing supply.”
Forrest also criticised the Coalition’s position on foreign investment, describing it as ideologically driven. “The Liberal Party is taking an ill-conceived, ideological stance, made worse by a none-too-subtle xenophobic attack on foreign investment,” he said. “Australia needs all the investment it can get when it comes to housing supply.”
The Albanese government has introduced measures to support the build-to-rent sector, including increased tax deductions for developers and reduced withholding tax rates for eligible projects. These reforms are intended to encourage investment and are expected to facilitate the construction of tens of thousands of new rental homes.
Forrest said the Coalition should focus on policies that improve productivity and address factors such as union activity and government-imposed costs, which he argued have a greater impact on housing supply. “Right now, demand for housing far exceeds its supply. Whether it is BTR or BTS, the main game is to boost supply,” he said.
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