Welcome to Finance and Fury,
Past few Monday eps on Share concentration – and the holdings and influence that super funds have
Today – talk about the legislation put into place and the plans going on now where you might end up renting an apartment from your super fund or bank
The plan to help increase apartment supply – decline in prices = lower incentive for developers as a build to sell model – from slumping demand for apartment building
New residential product: “build-to-rent”
Won’t help Australia’s housing affordability stress, may make it worse, but it helps to achieve public policy objectives -
Look into other areas this has been implemented to see how well objectives met
What is it? This refers to apartment blocks built specifically to be rented, at market rates or ‘affordable rates’, and held in single ownership as long-term income-generating assets
Build to rent - developers and their financiers build multi-unit buildings and, instead of selling the units, retain them to rent to tenant households. Rents may be set at market rents or, for affordable housing, an appropriate discount to market rents could be offered with appropriate government support to make up the funding gap.
‘Build to rent’ is an established practice in both the UK and USA but it has not been taken up in Australia -
Large Corporate Landlords –
Buy to rent model - financial institutions that acquire large numbers of dwellings and make them available to the rental market, or potentially at a discount to market rents for low-income tenants if appropriate government support is provided.
Proponents claim LCLs and ‘build to rent’ schemes offer greater supply of rental housing, greater security of tenure for tenants, and better professionalism in tenancy management than small scale 'mum and dad' landlords.
Why hasn’t it taken off here yet?
- the tax treatment and returns in Australia make build-to-rent less viable.
The enduring owner might be, for instance, an insurance company, an Australian super fund, a foreign sovereign wealth fund, a private equity firm, or the building’s developer.
to enable an affordable housing element the government is looking at allocating sections of federal or state-owned redevelopment sites to community housing providers at discounted rates.
Who will live in this? – come back to this 9Global migration compact
Thank you for listening, if you want to get in contact you can do so here