Will ‘build-to-rent’ schemes fix Australia’s housing crisis?
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As build-to-rent schemes become further established in Australia, it’s necessary to question who ultimately benefits the most from them.
On a recent episode of The Smart Property Investment Show, Right Property Group director Victor Kumar delved into the feasibility of burgeoning build-to-rent schemes, discussing with SPI’s Phil Tarrant the viability of such initiatives and alternative measures that the government could employ to curb the housing crisis.
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Kumar detailed how he was of the opinion that the government’s increasing adoption of build-to-rent programs succeeded most in ousting control from prospective home owners and renters alike through granting hefty incentives and control to the corporations constructing the huge building complexes.
“Now if we change that around and gave the incentive to your mum and dad in suburbia, it gives you a lot more accommodation a whole lot faster, makes the renting out of properties far easier, and by and large fixes a whole portion of the scenario,” said Kumar.
Kumar stated how, on a surface level, build-to-rent programs are a conceptually sound initiative, but he was quick to caution that the approach is one that disregards the already existent supply of suburban houses.
Instead, Kumar believes current issues could be better curbed with proper incentives administered by the government that could turn into a very lucrative and practical solution to the housing crisis.
Espousing the notion that the first steps towards addressing the greater dearth of rental properties lies in government reform, he argued the current system is more weighted towards the interests of corporations, rather than individuals.
“I think there’s more politics at play here than really trying to fix the system, and if we were to fix the system obviously we would need to break it first because when you really look at it, the rental crisis that we have today is not just because of COVID,” Kumar stated.
The property expert was resolute in his belief that the government’s efforts thus far with build-to-rent programs have been operating completely in the wrong direction of fixing the housing crisis.
He argued that a further decentralised rental market operated by average Australian property investors would do far more to not only provide houses to the rental market but also stimulate the Australian housing market.
“The rental crisis deepens as we cease to empower the ordinary punter to provide accommodation,” said Kumar.
“We need to look at the whole global property system in Australia and see how we can fix it and how we can make it easier to build more accommodation for the renters.”
Listen to the full conversation with Phil Tarrant and Victor Kumar here.
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