Tuesday, July 23, 2024

Property Council welcomes rent-to-build move

The Property Council has welcomed the Government’s announcement today that it will introduce legislation to make it significantly easier for overseas investment in build-to-rent housing developments in New Zealand.

Property Council chief executive, Leonie Freeman says the move will fuel the fledgling sector.

“While we are yet to see the full scope of the amendments, we are pleased to see a ministerial directive letter will be issued under the Act to provide immediate certainty that New Zealand is open to foreign investment in Build to Rent developments and we know this announcement will be music to the ears of the nation’s Build to Rent sector,” said Ms Freeman.

The changes, announced today by Housing and Associate Finance Minister, Chris Bishop, will streamline the consenting pathway for overseas investors to purchase land with the intention of creating a new Build to Rent development or purchasing an existing one.

“Property Council has been working constructively with both the current Government and its predecessor to ease the barriers to investment in this exciting new housing model for close to five years,” says Ms Freeman.

“The previous approach to overseas investment for Build to Rent is broken. Current provisions within the Overseas Investment Act treat Build to Rent like ordinary residential property and require ministerial direction for investment. This uncertainty discourages overseas investors from entering the New Zealand market, making it challenging for operators to access development funding and damaging overall market liquidity.

“We are delighted the Government has followed its counterparts in Australia and the United Kingdom in enabling Build to Rent housing. Overseas investment is critical to unlocking the untapped potential of Build to Rent. If we want to deliver much needed new homes for Kiwis, at speed and at scale, this is an obvious lever to pull.”

She said built-to-rent will transform the experience of renting in New Zealand.

“Over time, Kiwi’s will have the option to choose between thousands of new, high-quality, rental houses.”

“Registered Build to Rent operators are required to offer at least 10-year leases to their customers, giving tenants certainty as well as the opportunity to live in a warm, dry, and climate-friendly Build to Rent home.

“Build to Rent homes are professionally managed, allow tenants to personalise their space and often come with great access to amenities. It is the fastest growing type of housing in places like the United Kingdom, offering tenants increased rental options and new ways of living.

“Previous Property Council research shows with the right policy settings, such as today’s amendment, in place, our 550 member companies, which include the nation’s largest residential and commercial property developers and investors, stand poised to deliver up to 25,000 Build to Rent homes in the next decade.”

Ms Freeman said today’s announcement goes hand in hand with the launch of Property Council’s build-to-rent tracker, which is due for launch on 21 March. It will track build-to-rent projects that have been completed, are under construction or in the pipeline on a quarterly basis via an online platform.

“We look forward to seeing Build to Rent numbers soar in the coming years as the industry and Government come together to make it easier for Kiwis to get into a warm, dry, healthy home,” she said.

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