Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

25,000 Planned Build-to-rent Homes At Risk Due To Government Policy

New data from Property Council New Zealand suggests that over 6,100 build-to-rent homes could be in the market within two years if the Government loosens the reins on the legislative barriers holding the sector back. Further analysis suggests this number could swell to over 25,000 new homes within a decade.

“This government has said time and again that they are focused on delivering more affordable housing, but history has shown that the private sector is often much better placed to build sustainably and at scale,” says Property Council chief executive Leonie Freeman.

Unlike a standard residential development, where units are built for individual sale, build-to-rent (BTR) developments are designed and built specifically as long-term rentals. The properties are owned by institutional investors and managed by specialist operators, while tenants are treated as customers, enjoying the benefits of living in high-quality, tailored apartments with secure long-term accommodation and the freedom to give notice when they choose.

“We like to call it ‘renting for the Netflix generation’,” says Freeman, “where rent is treated as any other pay-as-you-go service, like Spotify or Netflix. Tenants can plug-in and plug-out of amenities as their life unfolds. They aren’t buying the house – they’re buying the living experience.

“A survey of Kiwi BTR developers shows that there are 853 BTR units either currently under construction or completed across 21 sites, with an average of just over 40 units per development.

“Over the next two years we’re estimating that with the right policy settings this figure could explode to over 6,100 units across nearly 40 sites. These are credible, planned BTR developments that are currently in the pipeline for delivery, greatly expanding New Zealand’s rental stock.

“With government support, the BTR sector has the potential to deliver over 25,000 homes in just 10 years. Our members – who are primarily large scale commercial and residential developers and owners – tell us that delivery of these developments rely on several changes to government policy, including;

  1. Better clarity on the Overseas Investment Act, which could currently disincentivise large institutional investment in Build-to-Rent in New Zealand.
  2. Further definition of BTR as its own asset class – similar to that of student accommodation or retirement villages – which would make it exempt from recent interest deductibility changes. Reclassifying BTR as a commercial asset class would also change depreciation application and provide a genuine incentive to help unleash large numbers.

“BTR has real potential to house more New Zealanders comfortably, quickly and affordably. But if we want large-scale BTR to be unlocked, then the Government needs to stop blocking the path to progress and accept that this could be a simple solution to help ease Aotearoa’s housing woes,” says Freeman.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Building Activity Down In September Quarter
The volume of building activity in New Zealand fell 8.6 percent in the September 2021 quarter, compared with the June 2021 quarter, Stats NZ said today. Residential building activity fell by 6.4 percent in the September 2021 quarter, while non-residential building activity fell 12 percent... More>>


Government: David McLean Appointed As KiwiRail Chair

David McLean has been appointed as Chair of KiwiRail Holdings Ltd, the Minister for State Owned Enterprises Dr David Clark and Minister of Finance Grant Robertson announced today... More>>


Dairy NZ: ‘More Milk From Fewer Cows’ Trend Continues In A Record Year
Vodafone says it has 10,000 customers using its Wi-Fi Calling service. It took less than three months to reach that milestone; the service began operating in September... More>>



Xero: Data Reveals ICT Expenditure Key To Small Business Sales Growth
Xero, the global small business platform, today released a new report which shows New Zealand small business ICT expenditure has increased 25 percent compared to pre-pandemic levels - more than the UK (20%) and Australia... More>>


Fonterra: Lifts Forecast Farmgate Milk Price Range And Revises Earnings Guidance At First Quarter Update

Fonterra Co-operative Group today lifted its 2021/22 forecast Farmgate Milk Price range, reported a solid start to the 2022 financial year and revised its earnings guidance... More>>


Canterbury Museum: New Research - Bald Haast's Eagle Feasted On Moa Guts

New Zealand’s extinct Haast’s Eagle (Hieraaetus moorei), the largest known eagle, gulped down viscera like a vulture and may even have been bald, new research suggests... More>>

ABC Business Sales: Demand High For Covid-proof Businesses
Despite the continuing challenges facing businesses in this Covid environment, right now there are more buyers looking for a small-medium sized business than there are sellers in the market... More>>