Build-to-Rent: can it work in New Zealand?

Minter Ellison Note August 2019

It’s been a success story overseas – an alternative development model capable of producing quality housing affordable to both investors and consumers. But can the Build-to-Rent model work here in New Zealand?

This week, MERW (Andrew Monteith) brought together leading industry and legal property experts for a panel discussion on Build-to-Rent in the local context.

[The forum] heard from Andrew Stringer (CBRE) about the model in general – what it is and why we think we need it, while Patricia Green and Amanda Spratt ran through the key legal challenges, or opportunities facing the model.

Roy Thompson (co-founder and Managing Director, New Ground Capital) who spoke about New Ground Capital’s experiences implementing this model at Hobsonville Point and Whenuapai in Auckland, and in Queenstown, addressed the question on everyone’s lips – how do you make it work?

If you missed the opportunity to join one of the events, here are some of the key takeaways:

We need to broaden the housing conversation in New Zealand away from home ownership to include other models such as long term rentals. Tenants in New Zealand are generally poorly served by the rental accommodation market in terms of quality, management and stability.

Build-to-Rent can offer the quality and security of tenure needed to start shifting the market to a more professional and stable framework.The essentials – investment capital and rental demand – are there, but there are several hurdles, including the overseas investment regime, ill-fitting tenancy laws and a GST regime that favours those who build to sell. We can help to effectively work through these.

The model can work in New Zealand, but it needs assistance – be it financial or at the legislative level, from central and/or local government to unlock its potential here.As with all development, New Zealand’s high costs of construction remains a significant issue.

Our experts would be happy to have a chat to you in person about any aspect of Build-to-Rent or click on the links below for further information.

CBRE’s latest Rent-to-Build: Who? What? Where? Research report

Details of New Ground Capitals projects