The model for delivering residential assets in Australia is changing. Investor and consumer objectives have combined to make market conditions more supportive of multifamily residential in Australia.
Four propositions are at the heart of the sector’s emergence: a new product paradigm; investor return requirements; customer value proposition; policy initiatives. We expect these propositions to be increasingly accepted as mindsets change for investors, financiers, developers and governments and, as a result, there will be more investors seeking opportunity in multifamily investment.
Multifamily is a new product on the risk-return continuum combining both residential development and long term investment holding. It is aligned with investor needs for stable, long term cash flow due to high through the cycle occupancy and meets renter need for high quality/high service rental accommodation – increasingly important as purchase economics diminish.
In the US, multifamily is the second largest property asset class after office. If the Australian market evolves in a similar manner to the US, there is potential for a $300b investment market, or 300,000 apartments by 2036.