Sydney has the second least affordable housing market in the world, and the situation is not really different for remaining parts of the country. The supply of social housing – with rents capped at 25% of tenant income – has virtually halved in 30 years. The public housing waiting list across all jurisdictions rose by more than 8,000 households last year, from 155,141 to 163,508 while social housing saw an increase of less than 1% across Australia, from 436,333 to 440,192. Household incomes aren’t coming anywhere near keeping pace with rising home prices. The current monthly average income in Australia is 6220 AUD but the monthly average rental rate for an Australian house is 1996 AUD, which takes up approximately 32% of the monthly income. The evident unaffordability is opening new door of opportunities through affordable housing alternatives like Build-To-Rent (BTR) for the real estate developers.
CBRE has been actively investing on affordable BTR projects at various locations around the globe like recently in Milan they acquired a BTR project featuring 170 new affordable BTR homes. The number of investors targeting BTR has grown exponentially over the past 18 months, with over $3.5bn raised and committed to the sector. BTR developments are capable of providing lucrative profit for the developers without draining the residents’ income.