In 2025, Sydney is poised to become the focal point of Australia’s build-to-rent (BTR) sector, driven by a new governmental focus on housing essential workers, the Property Council reported.
This initiative aligns with broader trends seen across Melbourne, Brisbane, and Sydney, where the BTR market is rapidly expanding.
The New South Wales government has earmarked a $450 million investment for the development of BTR projects, starting with a 500-home project in Camperdown. This is distinctive for its inclusion of 200 discounted BTR units specifically for essential workers, alongside private and affordable rental options.
NSW Premier Chris Minns (pictured above) emphasised the initiative’s importance, stating: “That’s why our plan is delivering this well-located, secure and accessible rental housing for the essential workers who keep Sydney running.”
According to Knight Frank’s Australia Build to Rent Update Q4 2024, the BTR sector is witnessing significant growth, with approximately 8,900 BTR apartments currently under construction and an additional 20,000 units approved for the next five years.
This surge underscores increasing investor confidence and market demand for rental properties in Australia’s major cities.
Further emphasising the economic impact of this trend, a 2021 EY report projects that institutional build-to-rent projects could contribute $2.9 billion to Australia’s GDP and could support more than 17,000 jobs by the year 2025.
While Victoria remains the most developed BTR market, with more than 25,000 units in various stages of development, Sydney is catching up due to heightened investor interest in diversifying portfolios across the Eastern Seaboard.
“Sydney has been slower out of the starting blocks compared to its Victorian counterpart, but BTR development activity is now accelerating as investors look to gain a foothold in the city,” said John Paul Stichbury, Knight Frank partner for living sectors and valuation & advisory.
Despite some challenges, such as persistent build cost inflation and macroeconomic uncertainties, the sector has seen positive legislative changes and a growing appetite for rental investments.
Tim Holtsbaum, Knight Frank partner and head of alternatives for Australia, remarked on the sector’s resilience.
“The investment case for BTR has arguably never been stronger and this year activity will accelerate as we enter a rate-cutting cycle,” Holtsbaum said.
This year, as construction costs begin to stabilise and governmental policies become more favorable, Sydney's BTR market is expected to flourish, providing much-needed housing solutions for essential workers and attracting significant investment in the sector.
