AUSTRALIAN PROPERTY INSIGHTS
VERTICAL COMMUNITIES
SUPPLY SNAPSHOT
OPERATIONAL STOCK REMAINS MODEST
As of mid-2025, 11,000 units are operational nationwide, with approximately 20,000 more approved and just short of 12,000 under construction. This represents less than 1% of the national rental market and a marginal share of overall housing completions. Most of the current stock is concentrated in inner Melbourne and selected suburban precincts in Sydney – where feasibility, infrastructure access, and population growth most strongly align. While these early projects have helped prove the model, they remain a drop in the ocean relative to broader rental needs. Importantly, BTR still accounts for only a small fraction of total apartment delivery, and the broader pipeline shows few signs of a near-term uplift. Traditional Built-to-Sell (BTS) activity continues to slow amid high construction costs, weaker presales, and feasibility constraints. While BTS models depend on market timing and pre-sales, BTR’s build-to-hold structure allows capital to stay active and deliver housing through downturns and hedge against broader development volatility. The challenges in the BTS market present an opportunity for BTR investors to forward purchase schemes that were originally for BTS. This can happen either pre or post construction and allows the developer certainty of exit in a challenging environment for off plans sales and quicker deployment of capital for investors. PIPELINE EXPANDING BUT UNEVEN Looking ahead, Australia’s BTR development pipeline is beginning to take shape – but delivery remains weighted toward Melbourne and heavily concentrated in early-stage projects. Overall, the growth of the pipeline reflects growing investor appetite and an improving policy backdrop. But its uneven shape highlights the importance of location selection, planning certainty, and execution capability. With many projects still at DA or feasibility stage, the gap between intention and delivery remains wide.
CURRENT OPERATIONAL UNITS
14,045 20,247 UNITS IN PIPELINES
1,512 5,538
Sydney
Melbourne
STRUCTURAL UNDERSUPPLY AND THE SCALE CHALLENGE Despite growing investor momentum, BTR delivery remains a fraction of what’s needed to address Australia’s chronic housing shortage. Across Sydney and Melbourne – the country’s largest and most supply-constrained rental markets – combined BTS and BTR apartment completions have fallen to seven-year lows. Forward pipelines offer little relief, with delivery volumes still tracking well below long-run averages as planning delays, funding gaps and cost escalations weigh on the broader market. Many BTS projects are now stalled or shelved due to declining presales and uncertain feasibility. This presents an opportunity for BTR as unlike BTS it does not rely on presale funding or retail buyer sentiment. Its build-to-hold structure allows delivery of rental housing at a time when other forms of supply are pulling back, giving it strong counter cyclical credentials. Historically low vacancy means that new product is being absorbed quickly and commanding strong rents. Official forecasts show Sydney will require around 38,000 new dwellings annually, and Melbourne close to 46,000 just to keep pace with population growth and household formation. Current approvals and delivery volumes fall well short of these thresholds, and structural headwinds are unlikely to ease anytime soon. BTR can help to alleviate these shortages. Its delivery model aligns with long-term capital while its operational format supports scale in urban precincts and its fast absorption can drive placemaking in regeneration areas.
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CUSHMAN & WAKEFIELD
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