Why the build-to-rent model is gaining momentum across Australia

Australia’s foray into the build-to-rent (BTR) market may have been delayed – about 11 years after the US and six years after the UK – but it’s off and running today.

The nation’s first BTR project came about in 2019 when construction firm Grocon teamed up with ARM Architecture to convert the 18 towers that made up the Southport athletes’ village at the 2018 Gold Coast Commonwealth Games. 

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Now known as Smith Collective, the 71 flagpoles representing each competing country have been swapped out for everyday conveniences – a supermarket, a pub and restaurants – that serve residents of the 1252 apartments there.

It marked the beginning of a new chapter in Australian property development. Some wrote it off as a “craze”, but the BTR industry is proving to be anything but a trend.

Investors, tenants and developers are now enjoying the spoils of a maturing market that has moved beyond the proof-of-concept phase.

“The build-to-rent sector in Australia is relatively small compared to more mature markets, but growing quickly, and we’re seeing a lot of positive momentum,” explained Vanessa Orth, Lendlease’s managing director, investment management. 

“Its success really comes down to what people want and value. There’s a growing demographic of long-term renters who may not want to purchase a home or have deferred that decision, and instead want high-quality amenity, greater long-term flexibility and professional property management with a strong focus on customer service.”

The latest data reveals a steady future pipeline and sustained developer confidence in Australian BTR property. Just over 9000 apartments were operational in 2024, and by 2029, that’s expected to hit 46,000 – a near fivefold jump in stock, a Q1 2026 report by audit and accounting firm BDO found.

While Victoria led the way in the emergence of BTR, NSW is about to leap ahead. The number of apartments earmarked for construction in NSW by 2032 will surge by 740 per cent, compared with 132 per cent in Victoria.

High construction costs in Queensland and Western Australia have limited supply in these markets, while red-tape costs in Victoria, including stamp duty and absentee-owner taxes, are not winning over investors.

NSW, however, is enjoying the spoils of the BTR boom. This is largely thanks to renewed investor confidence, driven by planning policy reforms, including new rezoning programs and smoother approval pathways.

“Planning reform, tax settings, land availability and capital preferences are increasingly shaping where BTR can be delivered at scale,” said Luke Mackintosh, BDO partner, project and infrastructure advisory, real estate. 

“As a result, the next 12 months are likely to be defined by accelerated delivery in NSW, continued consolidation in Victoria, and selective expansion into other east-coast markets.”

Christian Grahame, Head of Home, notes that this momentum is reflected in tenant retention. “We have seen our BTR communities fill up quickly across Australia, and also most residents choosing to stay on at the end of their lease,” he says. “Generational low vacancy rates, and private landlords leaving the market in droves, mean that people want to secure a great place to live and also value the security of renting in a community focused exclusively on renters for the long term. Our residents span from students to retirees, and everything in between … they simply prefer the lifestyle and flexibility.”

From a renter’s perspective, the appeal of BTR lies in the purpose-built design of the buildings. Unlike most private arrangements, tenants can sign up for longer leases than the standard six to 12-month term.

“There’s the security of knowing that the building has been purposefully designed and is operated as a rental, and therefore it’s not going to be individually sold out from underneath them,” said Angela Buckley, fund manager, BTR sector lead at Mirvac. 

“We can ensure that move-ins are managed really well, that your electricity and your internet are connected from the moment you move in. We have a team that is on-site seven days a week to assist as well. And so that really resonates with customers because in the traditional market, as we know, there’s a lot of pain points in that process.”

New BTR buildings are leading the way in sustainability standards by meeting or exceeding the Nationwide House Energy Rating Scheme (NatHERS) and Green Star ratings.

“The clear benefit of a more sustainable and resilient building is lower energy costs,” said Buckley. 

Reduced running costs allow BTR buildings to offer a long list of shared and often luxury amenities. West Tower at Melbourne Quarter in Victoria boasts a residents’ lounge and rooftop terrace, a two-lane bowling alley, a home theatre, a golf simulator, co-working spaces, music and podcast studios and access to wellness facilities, including a pool, sauna and steam room.

BTR also makes inroads into Australia’s hard-to-shift housing shortages. Typically, projects have a proportion of “impact” or social housing reserved for essential workers. 

At Hume Place, in Crow’s Nest, Sydney, developer Thirdi has set aside 50 of the 500 apartments for healthcare workers priced out of the lower north shore. 

And at 25 Bank Street, Richmond, developer Home will launch its first affordable housing project consisting of 12 apartments for people working in healthcare, education and law enforcement.