Demand for secure rentals in Canberra could be met by build-to-rent initiatives, developers say.
A 14-storey build-to-rent development by Amalgamated Property Group and Base Developments is set to have tenants move in during September.
Named Oaks Canopy, it features 156 studio, one- and two-bedroom apartments, along with a gym, business centre and concierge services.
It has a cafe, children's outdoor play area, and entertaining spaces like a sports lounge and garden pavilion
Contracts have been exchanged for another development on Northbourne Avenue, Turner, by Cedar Pacific in conjunction with the ACT government.
It will include at least 270 build-to-rent units and at least 40 will be affordable rentals.
A development application for the site, sold by JLL to Cedar Pacific for $30 million, is expected to be lodged in the next year.
But as these developments rise, a question hangs: why build-to-rent in Canberra?
What is build to rent?
Build-to-rent housing refers to homes, usually multi-unit buildings, that are rented long-term, as opposed to being individually sold.
They are retained by one owner, traditionally an institutional investor such as a property investment fund or superannuation fund.
Most owners are looking for long-term tenants, with some desiring tenants for up to 15 years.
Build-to-rent usually includes all utilities and concierge services in pricing.
Affordability
Both Oaks Canopy and the Turner projects will be marketed to several demographics, with an emphasis on young professionals aged 20-35.
Amalgamated Property Group development manager Daniel Potts said build-to-rent was an affordable option for early career professionals - or even students - because utilities were included.
"It is a holistic service. That includes utilities, it includes efficiency in day-to-day life, whether that is organising dry cleaning or deliveries," he said.
"When you total up all the components of someone's day and what it costs them, we think it will be cheaper somewhere like Oaks than going and getting a private rental and sorting the rest out."
Mr Potts also said under the Oaks Canopy model, people would have the option to only rent the number of bedrooms they needed for sleep in, bringing down cost.
A central business area and library amenities with commercial-speed wifi will be included.
Rental prices for both developments are yet to be announced.
Longer leases, faster repairs
Developers say a major drawcard for build-to-rent is long-term tenancy agreements.
The ACT does not have a minimum or maximum lease agreement time under the Residential Tenancies Act and month-to-month agreements are not uncommon.
Victoria also allows month-to-month agreements. In NSW, these can only be entered into after a fixed-term agreement has finished.
Since 2019, rent increases in the territory have been limited to 10 per cent plus inflation per year.
But Cedar Pacific's chief investment officer Simon Frost said even with these protections, Canberra renters felt the squeeze of a tight market which build-to-rent could avoid.
"We will be offering three-year tenancies," he said, noting people could sign on for longer.
"People can kind of stay forever."
Amalgamated Property will offer six- and 12-month contract options.
They envisage renters who begin in a studio may update their leases to one-, two- or three-bedroom apartments as their needs increase.
Oaks Canopy will have 12-month leases available.
Mr Frost said tenants could expect security in the quality of appliances and speed at which issues were fixed.
"In the [Turner development] we are likely to turn repairs around in 24 hours," he said, adding the equivalent of 1.5 handymen would be contracted to the site.
The new share house concept
Cedar Pacific's legal and compliance officer Amy Sienkiewicz-Grob hoped Canberra's build-to-rent scene would provide a social home space, countering loneliness.
"There are a lot of young people under 30 living here for short periods, working in a government department for a one- to three-year period," she said.
"Historically, they would have moved in with friends or found people to live with."
She felt young workers were being "pushed out" of private share housing because of rising rent and energy bills.
The holistic costing of build-to-rent, and onsite social initiative, could help solve this.
"Build-to-rent in the way we are imagining provides that community feel in a way our student housing supply would have done," Ms Sienkiewicz-Grob said.
Why invest in build-to-rent in Canberra?
There has been much criticism that despite Canberra being an ideal place for build-to-rent on paper, the territory is slow to attract investment.
Experts previously told The Canberra Times the ACT's strict tenant protections were deterring major investors from choosing Canberra for their build-to-rent developments.
The ACT is the only Australian jurisdiction that limits the amount landlords can raise rents.
Luke Mackintosh, a partner at Ernst and Young (EY) who specialises in real estate and the build-to-rent sector, told The Canberra Times in 2024 the territory's rent caps were the biggest deterrent for investors.
"Naturally, Canberra should attract institutional investors," he said.
Mr Mackintosh said at the time rent caps were unappealing for investors when their outgoing costs were increasing.
"The groups we work with, they see that rental capping issue and they just say, 'Well, it's easier to go to Melbourne, it's easier to go to Sydney'," he said.
Mr Frost said his team saw Canberra as an ideal location to expand development aimed at young workers along the eastern seaboard.
"In Canberra, about 50 per cent of the inner north rents," he said.
"That figure is 54 per cent in Turner."
As Australians begin to rent for longer and the number of lifelong renters rises, Mr Frost said having long-term, mid- to high-income Canberra renters gave investors security.
Cedar Pacific was one of the first companies to invest in Canberra's build-to-rent market following release of the Turner land by the ACT government in 2022 and a tender process.
ACT Housing Minister Yvette Berry said the development would create safe and secure homes people could afford.
"We want every Canberran to live near the amenities they need - whether that's access to public transport, schools, shops, services or something else," she said.
