A property industry body has slammed the Brisbane City Council over “drastic rates increases” for student accommodation and build-to-rent properties.
In its latest Budget the Brisbane City Council introduced new rating tools for purpose-built student accommodation and build-to-rent proeprties as part of a focus on the burgeoning sectors.
Property Council Queensland executive director Jen Williams said some property owners had been slugged rates increases of more than 200 per cent.
Williams said the two sectors provided some of the highest-density housing in Brisbane, supporting supply and affordability issues in Brisbane.
“Brisbane City Council has previously acknowledged the importance of purpose-built rental housing in addressing the housing crisis,” she said.
“In the same Budget that introduced these drastic rates increases, Council announced an incentive package to stimulate the delivery of new build-to-rent projects.
“Streamlining planning processes on the one hand yet ramping up ongoing operating costs on the other hand, sends a mixed message to investors and ultimately impacts the level of rent being paid by tenants.”
Brisbane is home to about 16,000 students living in purpose-built student accommodation while a number of build-to-rent projects are now under construction.
Property Council student accommodation president Anouk Darling described the rate hikes as “absolutely unfathomable”.
Brisbane has some of the lowest vacancy rates in Australia in student beds.
A report released late last year by the Student Accommodation Council—an arm of the property council—revealed many Australian cities were already at capacity for student accommodation beds, with Brisbane, Perth and Adelaide expecting zero vacancy rates in 2023.
Cedar Pacific is spearheading one of the state government’s pilot project sites, while Frasers Property is developing its Brunswick Street build-to-rent, Mirvac’s Newstead is under way, and Lendlease recently broke ground on its build-to-rent community near the showgrounds.
There are plans for other build-to-rent projects in the Olympic Games Gabba precinct and the athletes village area at Hamilton.
The city opened its doors to the growing asset class but concern is growing that this latest move could take some of the heat out of the market.
A build-to-rent developer who did not wish to be named told The Urban Developer that developers and operators were likely to pass on the additional costs to end users.
“Operating costs are a big consideration in the long-term viability of build-to-rent projects,” he said.
“Build-to-rent owners hold these assets for up to 20 years and this increase in costs amplified over that time would be heavily scrutinised.”
The Brisbane City Council was contacted for comment.
Article source: www.theurbandeveloper.com