Watch out Bears, this is the end of mass home ownership as I predicted years ago. The banks will set up corporations to finally rig the system out of your reach as they use this to change the business model of housing.
This is the next stage of the Transmutation.
Quote:
Build-to-rent properties the ‘panacea’ Australia’s out-of-control market needs
ASK any inner-city resident the worst thing about renting and chances are they’ll have unleashed an aggressive spray and listed off a litany of complaints before you’re even had time to regret your question.
Renting can really suck.
There’s the insecurity of living at the whim of your landlord who at any moment could decide to sell or settle into the place you pay to call home, or jack up the rent.
Then there’s the issue of making the property feel more homely. Fewer people being able to get a foot in the property market means fewer people are able to paint walls, hammer in hanging hooks or make any minor renovations.
There are benefits too — none of the overheads that come with property ownership, greater agility, and opportunities to live in otherwise unaffordable locations — but overall, Aussie renters are getting a pretty raw deal.
COMPANY-OWNED BLOCKS NOT A BAD IDEA
Now a new report from Ernst and Young is proposing a radical new way of building homes specifically to be rented that could revolutionise the way tenants live.
Build-to-rent or multi-family property is an popular asset class in the US and Europe, but it just hasn’t taken off here. The concept has already been backed by the Property Council of Australia, and is supported by other recent studies.
As the name suggests, build-to-rent properties are developed with the purpose of later renting out the residences — usually apartments — rather than selling them down to the individual owners or investors.
It means that the developer or group of investors with interests in the building would maintain an ongoing interest in the property, rather than building apartment blocks and moving on to the next property without having to ever think of the living experience of tenants.
It could also allow, as the report recommends, for longer term leases to be introduced, centralised building maintenance services on site (rather than having to call the real estate or landlord), and even discounted rents and more flexibility for tenants to redecorate and feel more at home.
While it might sound ominous having big companies own these properties rather than mum and dad investors, Luke Mackintosh, partner at Ernst & Young’s real estate advisory services, says he sees no noticeable disadvantages for tenants.
“We believe the main advantage is the increase in the type of product available to rent within preferred locations in Australia i.e. within 15km of CBDs and close to transport nodes and employment zones targeting key workers,” he tells news.com.au.
“I believe, and based on the experience in other parts of the world, institutional grade multi-family housing tends to streamline the process of renting by providing tenants with the stability to live long term in rental property, should they elect to do so, without the risk of the owner selling, greater reaction time to any repairs and maintenance, access to modern properties within sought after locations and security in tenure over the property.”
LOCKING BUYERS OUT OR ANOTHER INVESTMENT OPPORTUNITY?
The build-to-rent or multi-family model has been embraced in densely populated areas overseas where the homeowners dream has either been forgotten or was never alive.
In European countries, it’s diminished some aspects of the differences between owning and renting with some families able to stay in the same property for two or three generations.
An obvious argument against the model, and one often embraced by Australians raised on the dream of owning their own home, is that it strips potential homeowners of the opportunity to buy apartments, by keeping them in the hands of developers or major investors.
But RMIT built environment expert professor Chris Eves has a counter argument to that.
He describes the build-to-rent model as a “panacea” to Australia’s ridiculous property prices.
“What it does is open up another investment opportunity and an alternative to buying house,” he tell news.com.au.
“If an institution, say a residential real estate investment trust wants to be an investor, then a lot of mum and dad investors could purchase shares in a trust, so they get the rental income, but there would also be more liquidity because if they decided to sell, they’re not actually selling a property but a share of the building which would be a lot quicker than selling on the residential market.
“For a lot of people they’d see it better than owning property directly.”
APARTMENTS COULD FEEL MORE LIKE HOME
Prof Eves said the build-to-rent model allows for longer leases as well, which landlords on the private rental market are traditionally hesitant to allow.
“It’s quite amazing that in Australia, a long-term lease in considered 12 months,” he said.
“One thing that we hear landlords complain about in the current market is tenants not doing anything and not taking care of their properties, but a lot of that is because, really, they don’t know if they’re going to be there in two months so they consider it not their problem.
“I know if I’m going to be living somewhere in 2, 5, 10 years or however long I need to be, I’ll be more willing to take care of the place and treat it like my home. And if a tenant wants to add to a property, in a build-to-rent situation that will likely be supported because it’s adding value.”
News.com.au spoke with a number of renters who were keen on the idea of taking landlords out of the picture when it came to renting.
“I would rather rent from a company than an individual. With a landlord there’s always
the risk that they’ll move into the property themselves,” one Melbourne tenant told news.com.au.
Another Sydney renter, who had moved five times over the past six years, said: “We hate the uncertainty of renting and we want to buy so we an have a place that is our own, with less restrictions. I can see lots of great potential in (the build-to-rent) kind of structure.”
Watch out Bears, this is the end of mass home ownership as I predicted years ago. The banks will set up corporations to finally rig the system out of your reach as they use this to change the business model of housing.
Watch out Bears, this is the end of mass home ownership as I predicted years ago.
Will this be happening before the aliens take over or after?
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Yeah so sad too bad; Some uppity little f***s down in in Sydvegas/Melvegas has gotta eff off outta tha joints 'n retire elsewhere ... Why woud I give a rat's?
Get back to us when you can engage in the argument like an intelligent adult.
Perhaps we could start with the the 1 in 3 apartment owners in Perth selling at a loss during the March quarter? Or the 4.2% fall in Perth prices over the past year?
... Perhaps we could start with the the 1 in 3 apartment owners in Perth selling at a loss during the March quarter? Or the 4.2% fall in Perth prices over the past year? ...
Tha thread's not about Perth ya silly cnt.
A Professional Demographer to an amateur demographer:"negative natural increase will never outweigh the positive net migration"
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
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