BTR on cusp of becoming a major housing sector

In the run-up to its successful election campaign two weeks ago, housing spokesman Chris Bishop says a National-led Government will move quickly to make two legislative changes to help build-to-rent (BTR) developments get off the ground – amending the Overseas Investment Act to give greater certainty for institutional investors to invest and changing the Income Tax Act to ensure developments are eligible for depreciation deductions like other commercial buildings.

BTR developments are mainly large residential, often multi-unit high-density, developments designed specifically for renting rather than sale, with long-term up to 10-year leases, the ability for tenants to make minor changes and perhaps keep a pet. 

Bishop says build-to-rent developments are an important part of housing markets in countries New Zealand likes to compare itself to, but remain rare here. “It’s nuts that retirement homes, rest homes and student accommodation have an easier ride through the Overseas Investment Act than build-to-rent developments. We will make sure they are treated the same.”

New Ground Capital co-founder and managing director Roy Thompson says the fact the Labour Government made it unattractive for foreign institutional investors to invest in the market held it back.