Industry Issues

Industry Issues pulls together some of the most interesting and important themes in the strata industry over the past few months.

Emerging alternatives to traditional housing options

As the housing markets across Australia and New Zealand continue to tighten, we are seeing discourse shift more and more to the feasibility of alternative housing options that may serve to offset demand.

Build-to-rent: Build-to-rent (BTR) are developments that are purpose built to consist of multiple housing units that are exclusively offered as a rental option, generally with a single party maintaining ownership of all properties.

The main advantage offered by BTR developments is that they minimise the need for governance, with decisions around investment, maintenance and development made and implemented far easier.

Conversion of commercial offices to residential housing: Low commercial property vacancy rates and surging demand for housing has led many to ask if commercial offices could be converted into residential housing.

Whilst promising, converting office spaces to residential housing is not as easy as it sounds. Office spaces are not constructed with residential liability in mind, and as such things like HVAC, lighting, internal fit outs, location etc. are all issues that limit the suitability of properties for conversion.

Housing Australia

The Australian Federal Government has been assessing ways to tackle the ongoing housing crunch facing the nation since their election in 2022. Recently, this has manifested in a significant number of programs being proposed.

Housing Australia Future Fund: The Commonwealth Government is seeking to establish a $10 Billion fund, that will aim to build 30,000 new social and affordable housing properties across Australia over 5 years. The fund would represent the single biggest investment into social housing in over a decade.

Help to Buy: ‘Help to Buy’ is a program that has been announced as a “shared equity scheme,” meaning that the government will assist low-income home buyers with an equity contribution of up to 40 per cent (which essentially acts as an interest free loan).

The scheme is scheduled to run for a total of 4 years (from 2024), aiming to support 40,000 purchasers with eligibility dependent on a number of factors.

Rental freeze: The Australian Greens have continued calls for countrywide rental controls, either through rent caps that limit how much and how frequently landlords can increase rent, or rent freezes that prevent landlords increasing rent completely.

Although evidence globally shows that rental controls of this capacity can be effective, feedback suggests that in Australia, due to the number of domestic property investors, rental controls would not be sensible, and should only be used for emergencies in the short-term.