Property Hub - Investment Insights & Inspiration - Realty Talk: Key to easing rental stress

Episode Date: August 5, 2023

Nearly a third of Australian households are now renting and rental vacancies are at their lowest level ever.  This is happening now, before the floodgates open to the arrival of nearly 1M new migrants in the next 2 years.  The pressure is extreme and will get worse before it gets better.  A solution could be possible and this week we tell you how. NEW – Join the Property Hub community on Substack! Sign up to get Australian property news, opinion, and episodes in your inbox: https://propertyhubau.substack.com/ Subscribe to RealtyTalk on the Property Hub channel: Apple Podcasts | Spotify | Google Podcasts | Email Property Hub is a collaboration between Bushy Martin from KnowHow Property, Kevin Turner from Realty, Andrew Montesi from Apiro Marketing and Apiro Media, and Australia’s largest independent podcast network DM Media. Business and partnership enquiries: [e-mail] omnystudio.com/listener for privacy information.

Hi and welcome to Realty Talk, one of the shows on the Property Hub, distributed by DM Media, and you'll find us on all podcast players and through the Southern Cross Oz Stereo Network. Realty Talk is Australia's longest running property podcast with over a decade of presenting property investment insights, inspirational stories and unbiased advice from Australia's top property experts, leaders and analysts. Well, we're sad to say that the housing and rental crisis is still a hot topic with, from what we can see,

very few worthwhile solutions being offered by our lawmakers. And the current problems haven't just happened overnight. They've been caused by a lack of consistent and sustainable housing supply, which has been worsening year on year. Well, there's a possible solution that we want to explore this week. It's called Build to Rent. Build to Rent is well established in the UK and in the United States

and is sometimes referred to as multi-family housing. Nearly a third of Australian households are now renting and rental vacancies are at their lowest level ever. And the pending arrival of a combined 700,000 new migrants this year and next Most needing rental accommodation, well, the situation's going to get worse before it gets better. To get a better understanding of what build to rent is and what it means, Bushy is joined by Dr. Diya Swati, who's the Chief Economist at PRD Real Estate. She leads a nationwide research team providing high quality market research,

as you'll see in this exclusive Realty Talk interview. Before we get to that, if you like the show, make sure you hit the subscribe button and help us to continue to bring you the very best guests. We'll be back in just a moment as Bushy kicks off this week's show. Property depreciation is the natural wear and tear of a building and its assets. Property investors can claim depreciation as a tax deduction each financial year. Depreciation is a non-cash deduction. This means you don't need to spend any money in order to claim it. On average, BMT tax depreciation find residential investors

almost $9,000 in first full financial year deductions. Call BMT on 1300 728 726 today for an obligation free quote. Realty Talk and your host, Bushy Martin. Welcome to Realty Talk, Dr. Astley. Hello, thank you so much for having me. Yes, I really appreciate you coming on the show. I've been doing a lot of reading around the subject in recent times and your name keeps popping up so clearly you've been doing some pretty active work in that area but to kick

things off Dr Asti in very simple terms what is Build to Rent? So Build to Rent is a commercial residential development and it is known throughout the world as an alternative way to increase rent supply um any the supply can be houses which is also known as family built to rent or as you've mentioned the multiple dwelling um scenario or it can be units and apartments which can also be named uh or called stacked apartment in different parts of the world now basically in very simple terms is that a developer builds residential stock with the purpose of renting it out and not selling the property itself which is completely different to your standard normal sort of like residential commercial project developments where the builder's purpose is to build as much as

possible as quickly and as less cost as possible and make that quicker profit by selling the property makes complete sense so it's a that's a real cash flow play is what i'm hearing so Break down for us, how does build-to-rent actually work then? So the way that it works, in Australia, most of the build-to-rents are units and apartments in nature. So if you kind of think of like those big tall buildings in the major capital cities or in the fringes, anywhere from 100 to 400 apartments,

it really depends on the developer or the builder, and they all contribute to the rental market. The way that it works is you have a joint venture, usually, between a builder or a developer. Some builders and developers are one, and some are builder or developer, as well as some sort of multi-fund or a superannuation fund that is kind of like your capital backing kind of thing. So, combined, they will build a building filled with all of these wonderful units currently in Australia. And the purpose of it is that renters can then apply to become long-term tenants. And normally, and I'll say the people, because sometimes it can be the builder or the developer, they are the property managers as well. So they are the property managers on site, and you've got renters that can apply for long term tenancy, depending on the BTR, it can be anywhere from two to five to 10 years. So, you know, it's one of those development development that is very much so a one stop shop, in the sense that if you go into a BTR, it's not just units, normally, it provides that community type experience.

so depending on the btr and i've seen btrs that are um in inverted form as basic because it kind of looks the same as your standard sort of like units and apartments but then i've also seen btr that are quite swish you know the ones with like rooftop or hangout areas um cinema shared working space even a puppy washing facility um even ones that has like a tesla car charging stations that you can then book on an hourly or a two hourly slots electric scooter rentals um you know basically trying to minimize that transport costs because um there aren't well sometimes there is a lot of the times there aren't even parking available in a built rent so it is very different And in a fairly broad spectrum, by the sounds of things.

So I wonder if you can perhaps share with us some examples of where else in the world that built-in or BTR has been utilised effectively and why? Well, there's quite a lot of examples. The father, in inverted commas, of BTR is definitely the UK and the US. Although if you do go to the UK and the US models, it's quite different to ours. So if you think of it from a Lego houses perspective, when someone in the UK and the US says that they're going to put on 200 BTRs, for example, what they mean is 200 small or mini houses that might share, you know, the divider that share a wall. so it kind of looks like lego houses like in a row or in a circle kind of thing so some of the really really good examples um there's the 555 tent in new york that was developed by extel and

that's luxury rental units um you've got john lewis in the uk that's anywhere between studio flats to four bedroom houses um and one that i like is called the tower and i might say this incorrectly the tower yokohama kitanaka that's a high-end btr development in yokohama that was developed by the mitsubishi estate residents um you've got invitation homes and american homes and they are the two of the largest single family rental companies in the u.s um you've got sigma capital and that's also in the uk again they're also houses typically a bit more larger and another favorite of mine i like this one because not many people will think of it is the fizz which is located all the way in frankfurt and that's developed by international campus ag and again

it's also another high service highest amenity btr model interesting well what i'm finding interesting about what I'm hearing here is that I had in my head that we're talking units and apartments and high-rise buildings, but that clearly the model equally can apply to a broad range of different housing types, which is quite exciting, I think. Now, you've covered some of this already, but how else does it differ from the more traditional property development model in Australia then? Well, the main difference is the purpose, right? So that is the main difference um it because of that purpose then it becomes different on who is the target market because obviously you're not building to sell you're building to rent and so you're targeting

a completely different demographic because you're targeting people who are renting and not home owners or first home buyers right and so because that's different it also means then as a developer you have to sometimes uh put up or kind of absorb the costs because you can't use the first home buyer um incentives or you know i think there was quite a lot when the first home buyer incentives came out a lot of developers did the whole like will match the 25 grand thing um which of course you can't use in a btl because you're not targeting first home buyers you're not targeting owner occupiers right so because that objective is different then everything is different so build to rent is much more longer term because you're talking of rental markets that is anywhere

between 2 to 15 years so you're holding the stock for a much longer period whereas build to sell well depending on your build time once it's built then you want to sell everything off and a lot of the time you've already sold about 70 to 80 percent of it in the pre-sale because that's what you need to have the project green lighted so all of this objective has a massive effect on how the property is designed what amenities are included how is it funded how is it managed and just from that basic sort of um you know purpose it really does differentiate build to sell and build to rent Yes, that basic principle upon which you're designing, which is rather than sell, you're looking to hold, I can imagine, and let's face it, there's a whole heap of depreciation benefits that will be associated with that, which would, in some ways, incentivize the developers to put in a higher spec so that one of the tracks better tenants, but also improves the cash flow from the depreciation benefits that fly through. and you're clearly you're also attracting a much different type of person with a different outlook

which means that as you say the design solutions need to reflect that to make them both initially attractive but but also ongoing so now that's awesome so now again you've touched on some of this already but can you just reinforce who the key players and beneficiaries of btr are so there's quite a large pool of people um and when i say people i mean companies obviously um who are playing in the space uh sometimes a btr can be owned by one company so for example some of the mervac developments the fraser's property heinz um they're normally single singularly owned but then it can also be owned by several partnerships so that can be either a few developers getting together and pooling their resources to minimise the risk, or it can be a builder slash developer

and some funding options. And normally that funding options is a wealth strategist or a fund management or a superannuation fund. So anyone in the BTR space would have heard of Braystar. And Braystar is one of the largest funds to date in the local Australian market. It combines three institutional investors joining to raise about $1.3 billion in a vehicle known as the Grey Star Australia Multifamily Venture Fund. Oh, that was quite a mouthful. You did that well, Meg. And they really do want to expand in Australia, and they do have their sights on a lot of Sydney and Melbourne sort of areas. You also have other partnerships like Grocon, GIC, UBS, all of them also targeting Melbourne and Sydney.

You have some smaller but still well-known names in the partnership like Blackstone, Morgan Stanley, Investor, Australia Industries or Annuation Fund, Vellum Fund Management, Sentimental Real Estate Corporation, Meritan. So there's quite a lot of people right now that is definitely playing in that BTR space. And from what I'm hearing there, they're big players with deep pockets too, is what I'm hearing, which probably means that the size and scale of these developments is likely to have a fair bit of horsepower.

You've covered off on the developers already. In terms of the ultimate ownership then, is it those players developing that are holding it ongoing or how does the ownership side of the BTR property work? So depending on how many people put in into the pool of resources, it really differs. So if it's one company, then it is owned by that one company. So a good example is the pilot BTR that is in Queensland,

one by Mervac, one by Fraser's, then they're the ones who build it. The ownership lies with them. They're the property managers as well. But then in other BTRs where there's been one or two builders or developers and then maybe two superannuation funds or another wealth management fund, a lot of the time the ownership is shared between the four and one of them is appointed as a property manager, normally one of the builders or one of the developers. so it can vary from btr to btr but basically it's a model where um put bluntly the risk is with you and the reward is also with you yeah yeah which makes perfect sense so if you're going to take the risk then why wouldn't you enjoy the reward so that's awesome look uh thanks for those initial thoughts i see we're now going to take a short break so stay with us because when we return

Dr Asi is going to walk us through the pros and cons of BTR for all related parties along with the benefits and opportunities that BTR is likely to create. Property deductions can save you thousands of dollars each year. To make sure you maximise deductions you need to work with the most experienced quantity surveyor in the country. BMT Tax Depreciation is the leading specialist in the industry. They've completed over 700,000 tax deduction schedules for residential investment and commercial properties Australia-wide. BMT guarantee to find double your fee in the first full financial year deductions.

Call BMT on 1300 728 726 today for an obligation free quote. Subscribe now to Realty Talk. It's out every week. Now that we understand more about what built to rent means and how it works, the chief economist of PRD Real Estate, Dr. Asti Martiasmo,

is going to dig into the details. So, Dr. Asti, let's kick off by outlining what are the key pros and cons of VTR for investors, tenants, and other related parties. So, I'll start off with investors first. So, in terms of the benefits to VTR, it is low risk in the sense that you have that guaranteed rental income for, you know, however many units or houses that you do have. um you know whether it's a guaranteed income for two five or ten years that depends on the btr but you have that guaranteed income um so there is that low risk um that's number one the second one is that it diversifies your portfolio so if beforehand you are a build to sell developer now adding on a build to rent diversifies your portfolio so in a way yes it does increase your

risk because that means you're doing two projects instead of one but it does also mean that you diversify your portfolio and if at any time um any of those so for example the build to sell isn't working because the property market you know has gone down um i won't say the words crash because that can be scary particularly from an economist dr astley that's exactly right um so if at any time the build to sell sector um has a decline or a softening in prices you still have that steady income from the build to rent right so you diversify your portfolio it is another alternative exit strategy for investors it provides another one because you can still sell your btr there isn't a law that says that once a btr it must be a btr forever

so you know you might say look our strategy is that it is a btr for five years but then the renters have the option to buy it out after five years or however many years right so there is that alternative exit strategy and of course if you are lucky to have a lot of capital then it means you can deploy those capital in different types of investments so from an investor perspective that's your benefits in terms of the cons for an investor is that a BTR is expensive

you know you're not just building it to sell you have to really think about what amenities your people are going to need because the one thing about a BTR is that it really is promoting and relying

on this community feel it's relying on the this is a one stop shop So, you know, you have to really think outside the box. I mean, you know, a lot of build-to-sell developers won't be thinking about having a Tesla car-charging space where the Tesla can be booked every two hours, you know? Or the dog wash that you mentioned earlier.

Exactly, or the dog washing, or having like a co-shared working space or a yoga space, right? And so that means you do need a bigger piece of land. you need to really design your btr and all of that costs money so there is that higher cost which in a way does relate to higher risk as well um so that's the pros and cons for an investor um for a tenant some of the benefits especially at the moment with this current rental crisis is the security so once you are in a btr unless you violate all of the laws and the you know kind of everything in that btr you pretty much have your rental property for x amount of

years you're reliant upon the mom and dad investor who we know at the moment is tapping out of the market because of the cash rate increases and so um you know you're not prone to for example in queensland quite a lot of tenants were actually kicked out when the government tried to bring in the rental caps so you know you have that security right because you your property manager is say murvac as opposed to you and i um you know so there is that security um there is flexibility as well like i said there is the option to put to purchase at the end of your tenancy although that can be a long time um higher quality accommodation and i don't know if you've been to a lot of btrs but when i go to btrs i think that i'm in a five-star hotel because they are

very swish very polished it has that concierge sort of feeling and of course greater amenities um and you know you can save on some costs like for example your transport cost your not electricity sorry but your fuel cost um all of those kind of things because it is in the one place yeah and the other thing i'm hearing here dr asti is that there's obviously more community engagement and a longer longer term view both by the building owners and the tenants and therefore that level of connection is likely to improve as a result of a whole btr framework which which sounds awesome so that's great so on the flip side then dr asti are there any anyone who stands to lose from btrs um i would say it's not really in the sense of those who are involved in the btr

directly um just because it does target a completely different market right i mean there are some sales agents who might say oh you know that could have been another 400 units that i could have sold or another 200 units that i could have sold um but at the end of the day if this is not the purpose of btr that is the purpose of a bill to sell um and some mom and dads might say you know um oh that means that there's less renters like you know who's going to rent my property so to speak but in hindsight it's not really a loss to the mom and dad investors because btrs are normally located in the cbd and fringe areas they're not usually located in the suburbs um australian btr are mostly units and apartments and so if you're a house investor then you've

still got an upper hand in the stock and also um btrs are normally quite expensive too in the sense of the rental is normally about 10 above the median rent of that particular area so you know the mom and dad investor still has a place. It does not displace mom and dad investors for the points that I've said above. So yeah, it, it doesn't really directly negatively impact anyone as such. But of course there's always pros and cons to a particular development. Yeah, of course. So that's awesome that you've touched on this again already,

but I'd like to like to dive a little bit deeper into the actual demographics of btr tenants can you sort of share with us some thoughts around that um well do you know what though very funnily the first time that i heard about btr i thought that maybe i could actually go into a btr because i thought oh my goodness wouldn't it be so great that if you know i just have to go up three levels and then i can access the cinema go down four levels i can have yoga you know all those sorts of things like I thought oh maybe me um but then you know I then thought about oh okay how am I going to fit two dogs and a cat and three kids inside a BTR as well so you know it does it does target a certain type of demographic to a certain extent especially the

BTRs that are currently here in Australia because it is just units and apartments right now If we talk about BTR in a wider sense that includes, you know, the houses, the three-bedroom, four-bedrooms that you can find in other countries, then yes, you have a wider range of demographics. but here in australia it is definitely more so that under 35 years old um you know your young professionals working in the cbd or the cbd fringe um double income no kids especially if they're not requiring the standard family space like they don't want a backyard and multiple rooms that kind of thing um downsizes as well so the empty nesters so the people who are like say no that's it i've had enough of the five bedroom house where i have to look after the massive lawn um that's also the demographic and this is more like a mindset kind of thing but it is also i

think it's important to mention because bti is a long-term rent situation so it is more because of the rise of the long-term renter mindset where you have this new generation of like i don't really feel like i need to own a house or own my property because there's taxes that come with it there's council rates i can't just call someone if my you know tap is leaking you know all of these sorts of things i'd rather travel than you know try and pay off a massive mortgage and so there is also room for that demographic of my different mindset um that long-term renter sort of mindset yeah i i i'm just listening to you and thinking about as we go through where because you know my first thought was it's going to appeal to the the dinks as you as you quite well mentioned that don't want

to mortgage their upwardly mobile double incomes but as you say that the downsizing in for those that are asset rich but cash poor selling the family home parking some funds that they can invest that creates an income stream and then not not locking it up into bricks and water and just paying effectively a rental and a long-term exercise in an engaging community that's that is very low maintenance and easy to lock the door and and jump on a plane i think it's got a big appeal to those those sort of boomers that are coming through that are looking for that cbd city activity. So there's plenty of scope as far as that goes. So thanks for sharing that. Now, obvious big question, given all of the talk around the housing crisis around the country at

the moment, can you sort of expand on your thoughts on how BTR contributes to improving housing supply affordability and the obvious rental crisis? I love this particular question because it can be debated over hours and hours and hours between you know different people right um the short and sweet answer to that is that it does and it doesn't um it does to a certain like i'm being very politically correct here but it does and it doesn't at the same time you know um it does in the sense that you know at the end of the day you app you've added on a hundred or you know anywhere between 100 to 400 rental units right so that is um by definition that is housing supply yeah so it does assist from that perspective but of course as always that's a

technicality um it does contribute to rental supply but then it doesn't because it is only appealing to a certain demographic of people like the ones that we've just mentioned and also income level because most btrs are way more expensive um you know that was another thing that i thought of when i thought oh maybe i could go into a btr and then you know it's at least 10 to 15 percent higher than the median rent of the area and that is normally your standard btr if you wanted the puppy washing facility that i spoke about you have to kind of either choose an a la carte option or the premium btr so it's like a premium on a premium you know um so it really has that almost that discriminatory sort of sense to it on level of income um so it does add to

housing supply um from a numbers perspective um there's limitations on its effectiveness on a demographic and income sort of sense and so does it help rental supply yes but not fully um i'd say it assists about 10 to 15 percent of rental stress and rental crisis yeah so it's a helping hand but But I don't believe that it is the golden goose that everyone kind of points it out to be. Yeah, that's a very good point. And I think the other thing that needs to be considered with this, given it's in the early stages, is the timing of the completion of these BTRs in the context of the housing need. And that's always been Australia's problem. It's not even a just-in-time solution.

It's a just out-of-time solution generally in Australia because we rely so heavily on the private sector for housing supply, which means that people are only going to build it if it's profitable, and they'll wait for the demand to exceed supply before they actually pull the trigger. And I don't think it's going to solve that issue, given the size of the developments we're talking about. They're going to take a long time to actually be key ready in that sense. But tell me, given the very different model and the fact that government have been pricking their ears up over it at all levels, federal, state and local for that matter, can you sort of run us through the sorts of government incentives for BTR, if any, on a federal and state basis in particular? look i will admit that we have come quite some way when it comes to our legislation and also any incentives in the btr space compared to 12 months ago because i really started looking into the btr space around 2020 um and back then there is definitely a less agile government even knowledge in terms of btr what they are how they work what other things are needed right

So back in 2021, Management Investment Trust, or MITs, which basically allows offshore funds to be pulled from multiple sources to purchase that asset in Australia, so the incoming producing assets, such as BTR, they have an investor or a foreign investor tax rate, I should say, of 30%. and from um and we there has been a win um in the btr space which kind of then further paints it as the golden goose because from the first of july 2024 the withholding tax rate for eligible fund payments from the mit's um will go down from 30 to 15 so you know half of the tax right so that is definitely quite significant especially because of that foreign investment component and the ability to pool money to create a btr because as you just mentioned you know construction costs the cost of design everything in relation to the btr is quite expensive so having that more attractive and friendlier foreign policy is definitely going to help the btr sector that

was that was a win for those of us who are in the btr sector yes um land tax scheme is another issue for btr new south wales and victoria has a 50 land tax discount for new btr projects however that's only in new south wales and victoria so in queensland it's on what we call a gracia sort of scale it's almost basically saying it's on a case-by-case basis um there is incentives in queensland if you are targeting the affordable housing sector um if you are committing to at least 25 of your btr so if you have you know 400 units then at least 100 of them are categorized as affordable which means that you're okay with putting those those rent at a much lower level than the other um rentals in the btr so the queensland government

is very much so welcoming of that there is tax incentives there's also some dropped infrastructure charges things like that if you are willing to play in that affordable space um so yeah so there has been some improvements in terms of legislation incentives etc but then again I whenever I talk to my friends who are about to create or in the design process of a BTR the commentary on the ground is that the approval process is still very slow for BTRs it's kind of difficult and slow to get that planning process to also get the flexibility that is needed in a btr to get certainty in btr as well is quite difficult from a lot of different councils and state governments mostly it is in queensland that we are seeing or hearing these sticky points

victoria and melbourne is definitely known as the most friendliest capital or the most friendliest state when it comes to btr followed by sydney um and there's still some of those issues in queensland yes okay so an evolving space as the familiarity and knowledge of this grows across the community i guess in that sense yes so uh listening to what you've been saying is btr purely for high-end big dollar developers and investors like super funds and real estate investment funds and or what is the btr opportunity of any for mom and dad investors to get involved well this is the i feel like i'm such a bad news bearer on this particular question i was quite a week before um in terms of the opportunities for mom and dad investors it's very small in the btr

space right now and that's purely because of how btrs have been created um you know the opportunities within it it's usually built to sell developers looking to diversify their income um and it is usually created by a pool of you know managed super funds um wealth management people builders and developers who's been in the game for years and years and years and so because of how it has been um designed i suppose um the space for mom and dad investors is very very small at the moment i don't know of any btrs in australia where you do have mom and dad investors playing in it and the reason for that is because when you talk about mom and dad investors it's a very different financial situation to a developer or a big super fund right um there is that household financial

level decision as well in terms of cost of living and what's happening to the mom and dad there's all sorts of different legalities so for example if the mom and dad decide to separate or divorce then you know we haven't covered that in the btr space and how that might impact any kind of investment and so because of that and the purpose of the btr is to reduce the turbulence in the rental market, it has been kept within that institutional level. Makes sense. And I guess there'll be a lot of institutional investors that are getting their fingers burnt or potentially will from the issues that are being suffered in the office building sector

where traditionally a lot of those players have been involved. So I can see this as a good transition for them and therefore particularly the super funds being able to play our monies into developments with with good strong income streams and potentially better yields as a as a consequence of that uh what about fractional investment opportunities for mum and dads you know that we've seen a little bit of growth in fractional investment uh in similar types of uh building developments in the past do you think this will flow across into btrs um at the moment we're not seeing a big uptick on this yet um the only way that i know of of something of um you know mom and dad investors who's been able to

play in the bdr space is if they do self-manage their super fund um and they might actually you you know, a point that most of their super funds do go to property and do go to XYZ projects. So, you know, and that's not exactly the traditional way that mum and dads do property investment in Australia. So, you know, there is a little bit of that happening, but it's not a commonality yet where it is, you know, an investment potential for mum and dads.

Yeah, no, that's all good, but a growing space. I've really appreciated everything you've done. Are there any final thoughts on Australia's ongoing BTR opportunity then, Dr Asti? A few thoughts. The first one is that BTR at the moment is being

kind of coined the term. It's either a silver bullet or a golden goose, whichever way that you'd like to go with the terminology. There is a lot of talk, a lot of chatter about it. I think I've highlighted some of the pros and cons around btr um those involved in btr are pretty much facing

the same challenges as those in the bill to rent sorry in the bill to sell i mean um in terms of increasing cost labor shortages planning processes all of that is happening in the btr space as well and then so even though there are some forward thinking when it comes to you know less foreign investment tax or more incentives you know things like that there are still some sticky points in the bill to rent space that will see it you know it doesn't come as quickly as we thought that it will come so that's the first one the second one is that there are still some limitations to bti in the sense that i know for example i'm not ready yet to spend my life in an apartment for the rest of my life um and that's the current situation in australia is that most of our beauty

are our units and apartments and so you know most australians are still preferring to do the house picket fence yard dog situation i feel like i'm picking on the dogs but anyway i love dogs i'm and so there is still that whole sort of how do i fit like the australian lifestyle so to speak in the current btr offering i think you'll be completely different if we're talking about the family btr which is your smaller houses and it does have some sort of a yard so that will be different and of course the income as well for btr can be limiting because even looking at the Queensland pilot projects for example even with a 25% discount the kind of the rules around that is that the it's usually 25% lower than the rental income for those earning

less than 90k and you know the family income average income in Australia is less than 90k So even though it's called affordable, it's affordable with like quotation marks as opposed to true affordability. So there are still some issues there. But the good news is that we are seeing some opportunities outside of the capital cities. So, for example, there are some BTR projects that are being designed in Liverpool, Penrith and Wally Creek, all of those that are outside of that main Sydney CBD area. um so there is more talk about that um in regional in newcastle in tamworth even in with sundays as well up in queensland there is some talk about btr and so the spread of it is starting to become um you know more outside of the cbd fringe so there is some exciting

opportunities there but um both from an opportunity sort of like growing out but then also opportunity from different types of BTI that we can explore? Yeah, so it does require a bit of a paradigm shift for a lot of Australians to move from ownership to the renting exercise. I've been a rent investor a lot of my life at odd times because I like that flexibility. So that would be, I'll be quite open to it.

But a lot of Aussies would really struggle to jump over that mental hurdle to go down that road. But it's happening. It's an opportunity when there's times like these, this is when these sorts of opportunities come to the fore. And I really want to thank you for your very awesome overview on the full spectrum of details and opportunities associated with the growing build-to-rent approach, Dr. Astley.

Thank you so much for having me. Successful property investment is a game of finance. Do you have the right team and the right game plan? Realty Talk is brought to you by KnowHow Property. More than mortgage brokers, Bushy Martin and his team of investment architects architects set you up with a sustainable strategy structured to lower your costs, tax, risk and stress while increasing your capacity for growth. KnowHow has helped over

1,900 homeowners and investors secure more than $800 million in property wealth. So get set to live more, work less and live your legacy. Want to know how to invest in your freedom? visit knowhowproperty.com.au This is Realty Talk powered by realty.com.au And that brings us to the end of this week's show. A big thanks to our special guest to Dr. D. Aswati

who is the Chief Economist at PRD Real Estate and of course Bushy Martin. Before we go make sure you don't miss a single episode of Realty Talk or Bushy's Get Invested podcast delivered to you each week by subscribing to the Property Hub now on your favourite podcast player

or wherever you're listening to or watching this show. Thanks to our supporters, realty.com.au, BMT, Tax Depreciation, Know How Property Finance and Apiro Marketing for their ongoing support. I'm Kevin Turner on behalf of Bushy Martin and the Property Hub team. We look forward to seeing you again next week.