A new way of renting is catching in Australia – so why does the offer slide?

The number of build-to-to-rental units has grown up in Australia in recent years, with new projects with strong demand. But a new report shows that the momentum may not take place.

According to Knight Frank’s “Build to Rent Update” for the third quarter of 2025, the delivery of new build-to-rent units will affect a record high in 2025, which the One Set stands in 2024.

Build-to-interest (BTR) Housing is a model in which developers construct buildings with several units and then retain the apartments to rent out, instead of selling them to individual owners.

Although a popular form of housing in the UK and the US, where many rental buildings are often owned and managed by a single landlord, Australia has taken over, with small -scale landlords still the dominant investors.

But with BTR who offers greater fixed security for tenants, and these buildings including attractive facilities, Australians have picked up these lease contracts as quickly as they appear.

Last year 4660 BTR units were delivered at national level in 18 projects, but 2025 will considerably beat that with 6,000 new units that are expected to be made available to tenants, according to Knight Frank.

Although these recent figures represent a significant elevation compared to the previous five years, when the new BTR unit supply became on average less than 2000 annually, the data from Knight Frank indicated that, despite the demand from the consumer side, 2025 is where the revival will stop.

The delivery of new BTR units is expected to delay considerably in 2026, with the delivery pipeline influenced by feasibility challenges such as financing and high input costs. Currently, around 4000 units are predicted for completion during the year.

According to John-Paul Stichbury of the appreciation and advantage of Knight Frank Australia, it is now important that the attention changes to “stimulating the next wave of growth”.

He noted that economic factors will not be sufficient to encourage investments in this sector.

“In addition to improving the macro-economic environment, supporting government policy will also be vital for the long-term pipeline,” Mr Stichbury added.

“A consistent pipeline of new project invoices is needed to ensure that the recent delay is only a short-term blue, and the center of this is the possibility to activate the pool of approved diagrams.”

Liv Anura is part of Mirvac’s BTR portfolio, which includes four other developments in Melbourne and Sydney. Image: Realestate.com.au

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According to the estimates of Knight Frank, there are around 20,500 units in the pipeline that are in the dator-approved phase where construction has not yet begun. Many of these can be awaiting elements, such as securing the financial support needed to start construction.

According to Knight Frank Australia’s Head of Alternatives, Tim Holtsbaum, governments can help by creating beneficial and easy navigating tax institutions for investments in the sector.

“The BTR tax environment in Australia is difficult to navigate and a more uniform approach between states would be useful,” he said.

Mr Holtsbaum welcomed the government’s step last year to grant concessions to foreign managed interest rate people investing in the sector, but said that “tax on foreign investors remains problematic and this burden for institutional investors from abroad will help to increase the competence of an Australian, where the impediment of an Australian prospectes are”. ”

“As global investors scale their exposure to the living sectors, more participants are expected to enter the market as the sector becomes mature,” said Mr. Holtsbaum.

He noted that the basic principles of the sector remain strong, with high occupancy rate and a steady rental growth between BTR units.

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