Operational challenges and strategies for delivering the built-to-rent housing model in Australia: providers' perspectives

Australia's housing market is facing unprecedented challenges, driven by persistent undersupply, rapid population growth, and evolving demographic patterns (Amar and Armitage, 2025; Baig and Sarwar, 2024; Hulse et al., 2015; Joshua and Robert, 2017; Newell et al., 2015). Over the past two decades, urban concentration, rising single-person households, and migration pressures have intensified demand for dwellings, particularly in metropolitan areas (Tiwari and Shukla, 2024; Yates, 2016). Despite ongoing policy interventions, housing supply has struggled to keep pace due to labour shortages, rising construction costs, lengthy planning processes, and limited land availability (Hulse et al., 2015; Yanotti and Wright, 2023). These pressures have translated into affordability gaps, particularly for young adults, key workers, and low-to middle-income households, contributing to a structural shift toward long-term renting (Abidoye et al., 2023; Swanzy-Impraim et al., 2021; Tiwari and Shukla, 2024).

Several countries around the world have experienced similar issues and explored different strategies to ensure a sustainable supply of housing for rising populations (Hatcher, 2015). Among the various models explored, build-to-rent (BTR) housing has emerged internationally as a potential solution, offering professionally managed, secure, and long-term rental options while attracting institutional investment (Alakeson, 2013; Brill and Durrant, 2021; Framer and Donnel, 2013; Scanlon et al., 2018). Evidence from the United States and the United Kingdom highlights BTR's capacity to scale rental supply, improve tenant well-being, and integrate with housing policy objectives (Alakeson, 2013; Joint Centre for Housing, 2017; Swanzy-Impraim et al., 2023).

Despite the success of BTR housing internationally, previous studies highlight that BTR remains in its infancy in Australia, representing approximately 0.2% of the total residential market value (Tiwari et al., 2025). The National Housing Finance and Investment Corporation estimates that approximately 31% of Australian households are renters (NHFIC, 2022), a notable increase from the long-term average of 25% since the 1980s (Pawson et al., 2019; Stone et al., 2013). Homeownership rates have also fallen since the 1980s, in response to rising housing prices fuelled by long-term undersupply (Abelson and Joyeux, 2023). According to Abidoye et al. (2022), widespread adoption has been constrained by financial, regulatory, and operational factors, including high upfront costs, complex planning frameworks, low public awareness, and challenges in fostering strong-knit tenant communities. The current literature demonstrates that while BTR could help alleviate housing supply and affordability pressures, existing research has primarily focused on market potential, financing mechanisms, and international comparisons (Abidoye et al., 2023; Acheampong and Earl, 2020; Pawson et al., 2019).

However, there remains little understanding of the operational realities faced by BTR providers, including tenant management, community integration, and strategies to overcome regulatory and market barriers. Additionally, research examining the perceptions of key stakeholders, including developers, investors, and policymakers, is limited, particularly within the context of Australia's unique housing landscape and regulatory environment (Abidoye et al., 2023; Swanzy-Impraim et al., 2023; Tiwari et al., 2025). To address these gaps, this study explored the experiences of BTR providers in Australia, with a focus on the barriers to widespread adoption and strategies to address these. By analysing provider perspectives, the study identified practical strategies to improve tenant satisfaction, foster community engagement, and support the wider adoption of BTR as a viable housing model.

The findings highlight the challenges faced by BTR providers, the underlying factors that determine project success, and how developers are iteratively refining their approach to improve adoption. These early lessons drawn from active developers are critical for refining the delivery of BTR and guiding the development of a more consistent and effective national framework. For developers and investors, insights into tenants' experiences and operational challenges provide a clearer understanding of the realities of BTR, supporting more informed decision-making and helping shape best-practice models that enhance efficiency and tenant satisfaction. These lessons are equally valuable for government agencies and regulators, who require evidence-based guidance to design planning, taxation, and tenancy policies that balance investor confidence with tenant protection and housing system stability.

The housing market in Australia has undergone profound structural shifts over the past 2 decades, driven by a combination of demographic, economic, and institutional forces (Baig and Sarwar, 2024; Yates, 2016). A core challenge is the persistent undersupply of housing relative to population growth (Tiwari and Shukla, 2024; Yates, 2016). Rapid migration, urban concentration, and the increasing number of single-person households have placed unprecedented pressure on the demand for dwellings (Tiwari and Shukla, 2024). According to Amar and Armitage (2025), rental supply in major cities has long been outpaced by demand despite consistent government recognition of the issue and attempts to boost supply through favourable policies. Housing supply has also been constrained by labour shortages, rising material costs, lengthy planning processes, and restrictions on land availability (Hulse et al., 2015; Yanotti and Wright, 2023).

These issues have had a direct impact on homeownership trends, particularly among young adults (Chia and Erol, 2022; McDonald and Baxter, 2005; Yates and Berry, 2011). As prices have grown faster than incomes, home ownership has become increasingly inaccessible for younger cohorts, and low-to middle-income earners (Abidoye et al., 2023; Swanzy-Impraim et al., 2021; Tiwari and Shukla, 2024). This affordability gap has contributed to a structural shift toward long-term renting, marking a departure from the traditional Australian aspiration of home ownership. The rental market, however, has not evolved to accommodate this shift. Instead, renters often face insecure tenures, variable quality, inconsistent management standards, and limited rights compared to other advanced economies (Abidoye et al., 2023; Swanzy-Impraim et al., 2023).

In this context, expanding the supply of affordable and well-managed rental housing has become an urgent policy priority. Beyond affordability pressures, rental market conditions have become increasingly volatile, and vacancy rates across major metropolitan areas have reached historic lows, frequently falling below 1%, a threshold widely recognised as indicative of crisis-level undersupply (Pawson et al., 2017; Tiwari and Shukla, 2024). This tightening in rental availability has driven steep rent escalations, disproportionately affecting groups with limited bargaining power, including young adults, students, low-income earners, and migrant populations (AIHW, 2021; Chia and Erol, 2022). Compounding these challenges are systemic weaknesses in Australia's rental housing stock, which remains dominated by small-scale, individual investors operating within a fragmented and lightly regulated system (Hulse and Yates, 2017). This structure has produced inconsistency in maintenance standards, limited professional management practices, and widespread tenure insecurity, with short lease terms offering minimal protection against displacement (Newell et al., 2015; Swanzy-Impraim et al., 2023). As a result, Australia's housing market challenges reflect not only supply and affordability issues but also deeper institutional shortcomings that inhibit the delivery of secure, high-quality, and well-managed rental housing at scale.

These factors collectively highlight the limitations of the traditional private rental market and have intensified calls for alternative tenure models that deliver stable, high-quality, and professionally managed rental housing. BTR housing has gained prominence as one such alternative, particularly as international evidence demonstrates its potential to alleviate supply constraints, enhance tenant well-being, and attract institutional capital into the housing system (Abidoye et al., 2023; Swanzy-Impraim et al., 2023; Tiwari and Shukla, 2024). Unlike traditional rental housing, which is dominated by private developers, BTR has been positioned as a pathway for institutional investors to contribute to housing supply (Brill and Durrant, 2021; Gilbert, 2016). This distinction fundamentally shapes how the sector is conceptualised and governed. BTR is generally treated as a revenue-generating investment asset, particularly by institutional investors who prioritise stable income streams and long-term performance (Swanzy-Impraim et al., 2023; Tiwari and Shukla, 2024). Policy actors also increasingly view BTR as a potential vehicle for achieving social objectives, including improved affordability and greater security of tenure for renters (Abidoye et al., 2023; Pawson et al., 2025; Tiwari et al., 2025).

International experience provides compelling evidence that BTR can expand rental supply at scale. The model is well-established in countries such as the United States, where multifamily housing has existed since the 1960s and now constitutes roughly 27% of the national housing stock (Glaeser and Gyourko, 2025; Statista, 2025). Similarly, the United Kingdom has pursued deliberate policy strategies to stimulate BTR growth, including substantial government investment and reforms to strengthen the private rented sector (Alakeson, 2013; Swanzy-Impraim et al., 2023). Australia's BTR sector remains small by comparison, representing approximately 0.2% of the total residential market value and only 23 operating BTR projects as of October 2024 (Tiwari et al., 2025).

International experience also demonstrates that the growth of BTR markets is often closely linked to supportive regulatory frameworks, institutional investment structures, and favourable market conditions. In the United States, the BTR model gained further momentum following the Global Financial Crisis (GFC), when large volumes of single-family homes became available and were acquired by institutional investors for conversion into rental properties (Carvalho et al., 2023). This trend has also accelerated the development of purpose-built single-family rental communities alongside the more established multifamily rental sector. Due to its scale and relatively stable returns, the US market is frequently viewed as a benchmark for emerging BTR markets, with significant growth recorded in recent years. Similar developments have occurred in other countries. In Canada, the expansion of purpose-built rental housing during the 1990s was supported by policy reforms that relaxed regulations governing rental housing and introduced legislation enabling the establishment of real estate investment trusts (REITs) (August, 2021; Nethercote, 2020). In the United Kingdom, government incentives introduced after the GFC further accelerated investor interest in the sector (Brill and Durrant, 2021; Nethercote, 2020). These policy measures played an important role in facilitating institutional investment, contributing to rapid sector expansion and significant capital inflows within a relatively short period. Together, these international examples illustrate how regulatory settings, financial structures, and policy incentives can shape the development and scaling of BTR housing markets.

Despite slow adoption in the Australian market, there is significant growth opportunity within the sector, with projected 30,000 apartments in the pipeline and up to 150,000 apartments within a decade (CBRE, 2023). A recurring theme in the global BTR literature is the critical role of financing mechanisms (Abidoye et al., 2022; Framer and Donnel, 2013; Pawson et al., 2019; Tiwari et al., 2025). Successful BTR ecosystems are underpinned by diverse sources of long-term investment capital, including pension funds, private equity firms, real estate investment trusts, and not-for-profit organisations. The literature also highlights the importance of aligning BTR with broader housing system goals, particularly affordability (Swanzy-Impraim et al., 2023; Tiwari and Shukla, 2024).

The BTR sector in Australia remains in its early stages, although interest has grown rapidly in recent years (Tiwari and Shukla, 2024). Government initiatives have played a key role in supporting the early development of the BTR sector, notably the Queensland Government's introduction of pilot programs that partnered with private developers to deliver purpose-built rental projects, some of which incorporated dedicated affordable housing components (Carvalho et al., 2023). At the same time, growing participation from both domestic and international institutional investors has increased recognition of BTR as a viable real estate asset class with the potential to expand the supply of professionally managed rental housing in Australia. Policy reforms have further strengthened this trajectory. In particular, the introduction of the Treasury Laws Amendment (Build to Rent) Bill 2024 and the Capital Works (BTR Misuse Tax) Bill 2024 provide new incentives for the sector, including faster depreciation allowances for construction costs and reduced withholding tax rates for foreign investors. These reforms are expected to improve the financial feasibility of BTR projects and encourage greater development activity in the coming years.

Current estimates suggest that the national BTR pipeline exceeds 50,000 dwellings across more than 150 projects at various stages of development. Of these, approximately 6,700 units have been completed and are operational, while over 10,000 units are currently under construction (Urbis, 2024; Knight Frank, 2025). A significant share of projects, more than 20,000 dwellings, have received development approval but are yet to commence construction, reflecting ongoing feasibility and market considerations (Knight Frank, 2025). Despite this expansion, short-term supply growth may moderate. Deliveries are forecast to decline slightly in 2026 as projects delayed by construction cost escalation and feasibility challenges work through development pipelines (PWC, 2024; Knight Frank, 2025). However, broader macroeconomic conditions are expected to improve the sector's outlook. Easing construction cost pressures and a potential cycle of interest rate reductions are anticipated to enhance project viability and encourage renewed institutional investment. This recent growth of the sector has been driven by a combination of major developers and institutional investors. Leading domestic developers such as Coronation Property, Deicorp, Lendlease, and Mirvac have delivered or initiated several large-scale BTR projects across Sydney, Melbourne, and Brisbane (The Urban Developer, 2025). At the same time, the sector has attracted significant institutional capital through partnerships between developers and global investors. These include pension funds such as OMERS, Pensioenfonds ABP, Illmarinen, and Australian Super, sovereign wealth funds such as Singapore's GIC, and international real estate investment managers including Greystar, Oxford Properties, and Qualitas.

Growing academic interest reflects the need for context-specific insights into how BTR can be adapted to Australia's unique housing landscape. Pawson et al. (2019) explored BTR's potential to tackle Australia's housing affordability crisis, while Acheampong and Earl (2020) investigated the financial viability of BTR projects and their potential to resolve housing affordability challenges. Abidoye et al. (2023) investigated young adults' perceptions of the key factors necessary for a successful BTR model in Australia. Swanzy-Impraim et al. (2023) also investigated the prospects of this asset class in Australia, and further reforms required to ensure its continued growth.

Despite growing enthusiasm for BTR housing as a potential solution to Australia's worsening rental affordability and structural supply shortages, the literature consistently highlights a range of operational, financial, regulatory, and institutional barriers that limit the sector's capacity to scale (Abidoye et al., 2023; Swanzy-Impraim et al., 2023; Tiwari and Shukla, 2024). These constraints distinguish Australia from more mature BTR markets such as the United States and the United Kingdom, where policy reforms, targeted incentives, and well-established financing mechanisms have allowed BTR to integrate more seamlessly into the housing system (Alakeson, 2013; Joint Centre for Housing, 2017; Swanzy-Impraim et al., 2023).

Tiwari and Shukla (2024) noted that institutional participation remains limited, and large investors, such as superannuation funds, have been slow to integrate BTR into their portfolios (O'Callaghan and McGuirk, 2021). These adoption barriers are linked to the financial structure and risk profile of BTR developments, which demand significant upfront capital investment, involve long construction timeframes that rely on rental yields rather than sales revenue to recoup costs (Nethercote, 2020; Pawson et al., 2019; Tiwari and Shukla, 2024).

According to Abidoye et al. (2022), coordinated regulatory regimes and streamlined frameworks are also key to the success of BTR in Australia. Tiwari and Shukla (2024) partly attributed the successful adoption of BTR housing in London to its concentration on well-connected city fringes. This offers households the advantage of good public transport networks while delivering lower-priced sites for developers. In Australia, most BTR housing projects are situated in inner-city suburbs, where developers pay a premium for limited land while competing with traditional developers (Pawson et al., 2019; Rogaris and Angeline, 2020; Swanzy-Impraim et al., 2021).

Market perception also presents an emerging barrier. While BTR is promoted as a long-term, secure, and professionally managed rental option, there remains limited public understanding of how BTR differs from traditional rental housing (Abidoye et al., 2023). The extant literature also reveals that BTR is currently perceived as a high-end housing model, with rental prices that make it unaffordable for many (Swanzy-Impraim et al., 2023). A critical study of young adults found extremely low awareness of BTR, with respondents expressing strong concerns about transparency and affordability (Abidoye et al., 2023). Institutional research further confirms these barriers, noting that unfavourable tax treatments, complex planning processes, and insufficient affordable housing incentives significantly hinder BTR adoption (Tiwari et al., 2025). Without substantial government support and regulatory reforms to reduce development costs, BTR remains largely inaccessible to urban residents seeking affordable rental options.

From the perspective of renters, building a sense of community represents a significant barrier as they are increasingly priced out of homeownership (Fowler and Lipscomb, 2010). As Thompson et al. (2024) observed, renters frequently have limited opportunities to form local social ties due to high residential mobility, insecure tenures, and exclusion from decision-making processes within housing complexes. Hooper and Cadstedt (2014) also opined that assumptions about renter transience create a self-perpetuating cycle in which policymakers and housing providers pay limited attention to renters' needs. Crucially, the ability to foster a genuine sense of community is a major determinant of rental housing's appeal, particularly for young adults priced out of homeownership (Fowler and Lipscomb, 2010). Traditional rental spaces have historically struggled to replicate this, and without strong community-building advantages, BTR operators risk competing only with existing rental markets rather than offering a clearly differentiated product.

Given these dynamics, developing a deeper understanding of how BTR providers perceive and manage these challenges is essential. Such insights can illuminate both operational successes and barriers, thereby improving the model's long-term adoption and effectiveness. This is especially timely in the context of Australia's worsening affordability crisis and persistently low vacancy rates in major cities (Pawson et al., 2019). By systematically analysing provider perspectives, this study contributes to the development of more sustainable, community-oriented rental housing, thereby better positioning BTR as a viable component of Australia's housing system.

To examine the challenges and operational dynamics of the emerging BTR asset class, this study adopted a qualitative approach operationalised through semi-structured interviews with a sample of providers directly involved in the planning, delivery, and management of BTR projects across Australia. This approach enabled an in-depth exploration of provider perspectives, with particular attention to operational models, tenant engagement strategies, and developmental constraints that are not readily captured by quantitative methods (Creswell, 2014; Kumar and Ranjit, 2011; Saunders et al., 2007). Given the study's focus on understanding how BTR projects function in practice, both as housing products and long-term investment assets, semi-structured interviews were essential for uncovering contextual insights and industry-specific nuances.

Participants were purposively sampled to ensure that all interviewees possessed first-hand experience overseeing or contributing to BTR projects within the Australian residential property market (Creswell, 2014). This sampling strategy was well-suited to the study's objective of capturing the first-hand experiences of providers who interact with the full spectrum of BTR stakeholders, including tenants, contractors, financiers, local councils, and institutional investors. Although their perspectives reflect provider-side accounts, these respondents occupy unique vantage points that bridge operational, strategic, and regulatory considerations, making them ideal for analysing the evolving BTR landscape.

All participants held senior, managerial, or specialist roles within organisations actively developing or operating BTR projects. Their experience spans various components of the BTR value chain, including project feasibility, planning and design, construction delivery, tenant onboarding, community-building initiatives, and long-term asset management. This diversity of roles strengthens the reliability of the findings by incorporating complementary operational viewpoints within an emerging but rapidly growing sector. Table 1 summarises the professional backgrounds of the BTR providers who participated in the study. To ensure confidentiality, participants are anonymised using identifiers (BP1 – BP7).

Seven BTR providers were interviewed for this study, and although the number of interviewees does not represent the full breadth of the Australian BTR industry, the study was designed as an exploratory investigation into an emerging housing model (see Creswell, 2014; Saunders et al., 2007). Despite recent expansions, Australia's BTR sector remains relatively small, accounting for approximately 0.2% of the total residential market value and comprising only 23 operational projects as of October 2024 (Abidoye et al., 2023; Swanzy-Impraim et al., 2023; Tiwari and Shukla, 2024; Tiwari et al., 2025). However, this development activity has been driven by a relatively small number of major developers, including Mirvac, Lendlease, Coronation Property, and Deicorp (The Urban Developer, 2025). As such, the sample includes key participants from organisations contributing to the sector's current development activity.

The sample size is considered adequate given the exploratory purpose of the research and the structural characteristics of a relatively small but growing sector. Access to willing respondents remains constrained by the nascent nature of the Australian BTR industry, where the pool of active providers with sufficient operational experience to contribute meaningfully to empirical research is limited. Nevertheless, the achieved sample of seven participants, spanning development management, capital markets advisory, and operational management roles, provides a substantive and varied evidence base for drawing analytical conclusions. Crouch and McKenzie (2006) argued that small samples are not a limitation in qualitative interviewing precisely because the goal is depth of understanding, not population representativeness. Consistent with this, Young and Casey (2019) demonstrated empirically that samples of four to ten participants can be sufficient to identify the codes and themes that constitute meaningful qualitative findings. Within the property research literature specifically, Levy and Schuck (1999) drew substantive conclusions from a study of five respondents in an analogously specialised and access-constrained professional context. More broadly, Boddy (2016) contends that even single-case samples can be highly informative when the research context is novel, and the findings are potentially significant to an emerging field.

All interviews were conducted via Zoom video conferencing and lasted for 45–60 min each. With the interviewees' consent, each interview was audio-recorded and transcribed verbatim for thematic analysis. The interview schedule consisted of open-ended prompts covering several key themes: the current state of the BTR sector in Australia; drivers of growth; operational challenges; tenant demographics and satisfaction; regulatory considerations; financing constraints; and long-term sustainability strategies. These prompts guided the conversations while allowing participants to expand on issues of particular relevance to their projects and organisational experience.

Following the semi-structured interviews, the data were thematically analysed to identify recurring patterns, develop a structured coding system, categorise responses under analytically meaningful themes, and integrate these themes into an interpretive framework aligned with the study's objectives (Creswell, 2014; Kumar, 2011). In line with similar studies in this domain, this approach was selected for its flexibility in organising complex qualitative data while preserving the depth and nuance of provider perspectives (Creswell, 2014; Vaismoradi et al., 2013). This flexibility was particularly key, given the emerging nature of the BTR sector and the diversity of operational experiences across projects (Creswell, 2014; Saunders et al., 2007).

All interviews were transcribed verbatim and analysed using NVivo software, which facilitated systematic coding and organisation of the emergent themes. The initial coding structure was informed by the research objectives and by key concepts drawn from the growing body of literature on BTR housing models, rental housing, tenant satisfaction, and operational best practices. These included themes related to the regulatory environment, development feasibility, tenant experience and community-building, financing and long-term asset management, competitive positioning, and technological integration within BTR operations.

The coding process was both inductive and iterative (see Kumar, 2011). While the initial codes reflected the guiding research questions, additional concepts were identified directly from the interview transcripts as new patterns and perspectives emerged (Saunders et al., 2007; Vaismoradi et al., 2013). Nodes were created to capture meaningful statements, operational challenges, strategic decisions, or insights into tenant behaviour and expectations. This iterative refinement ensured that the coding framework remained grounded in the empirical data while maintaining coherence with the study's conceptual focus on understanding BTR through providers' experiences navigating the Australian rental market. Frequently occurring terms, concepts, and relational patterns were developed into preliminary codes, which were subsequently refined into broader analytical categories. These categories served as the basis for the thematic framework used to interpret how BTR providers manage emerging challenges and deliver tenant-oriented outcomes within a rapidly evolving housing model.

The emerging literature on BTR housing in Australia suggests that international models cannot simply be transposed, underscoring the need for context-specific research that examines the barriers and enablers of BTR adoption within Australia's unique housing, policy, and investment landscape (Abidoye et al., 2022; Pawson et al., 2019; Swanzy-Impraim et al., 2023; Tiwari et al., 2025; Tiwari and Shukla, 2024). Notably, homeownership continues to hold deep social and cultural significance in Australia, where long-standing aspirations for detached housing and private land ownership remain strong (Fowler and Lipscomb, 2010; McKee, 2012; Mintah et al., 2024). This, according to BTR providers, means that renting is still widely viewed as a temporary phase rather than a legitimate long-term housing pathway, limiting the extent to which BTR is perceived as a comparable substitute for owning a home.

This cultural preference for homeownership is compounded by concerns that BTR, in its current form, has not yet emerged as a genuine housing solution for the broader Australian rental market. Despite its positioning as a mechanism to address chronic undersupply, early provider experience suggests the model is disproportionately attracting mobile, transient populations rather than long-term domestic renters. As noted by BP7, the model is “pitched as a housing solution”, but this is not reflective of real-world experiences because the primary users have been recent overseas arrivals and international students rather than long-term domestic renters priced out of homeownership. This observation carries real implications for the model going forward. If BTR is functioning primarily as premium accommodation for internationally mobile residents, its contribution to alleviating Australia's structural housing shortage may be more limited than policymakers anticipate (Pawson et al., 2019; Tiwari et al., 2025). It also reinforces the affordable housing tension identified in the literature, where the cost structures underpinning BTR delivery push rents beyond the reach of the mainstream rental market the model is intended to support (Nethercote, 2020; Swanzy-Impraim et al., 2023).

Although interest in build-to-rent has grown in recent years, its actual uptake in Australia remains limited, with only a small number of projects currently in operation (Cranston, 2017; Pawson et al., 2019; Rogaris and Angeline, 2020; Tiwari and Shukla, 2024). Even among active providers, the scale remains modest; for example, one major operator reports only three operational assets in Melbourne, totalling fewer than 1,500 apartments, with two additional projects under construction adding roughly another 1,000 units. This slow delivery rate reflects deeper structural challenges that have constrained the sector's growth. Providers consistently highlight financial feasibility issues, planning delays, and protracted approval processes as key barriers, noting that these hurdles have stalled pipelines and prevented many prospective developments from advancing (Acheampong and Earl, 2020; Pawson et al., 2019; Tiwari et al., 2025).

Provider experiences with BTR in Australia reveal a sector marked by uneven progress, with some operators reporting promising momentum while others describe significant operational and financial strain (Abidoye et al., 2023; Pawson et al., 2019; Swanzy-Impraim et al., 2023; Tiwari et al., 2025). Their overall perspectives reflect the burgeoning state of BTR, marked by shifting tenant profiles and fluctuating demand across different cities. One provider (BP3) reflected a negative outlook on the sector: “I would say it's struggling; we have a pipeline issue. BTR is just really difficult to stack financially. The protracted planning approval process has killed a lot of prospects”. However, another provider (BP2) is confident in the sector's prospects: “(BTR is) maturing. It's past what you would call the nascent or pilot stage. We are past producing pilot buildings. I regard our first buildings as effectively very expensive pilots, but they demonstrated the proof of concept, and they have now been operating for a number of years. Proof of concept has been achieved at some price points and across most major cities in Australia”. For planning authorities and financial institutions, these findings highlight the need for a more uniform and coordinated framework that streamlines approval processes, clarifies regulatory expectations, and establishes consistent financing pathways to support the scalable adoption of BTR across the different Australian sub-markets.

BP5 noted a discernible increase in applications for BTR and co-living schemes over the preceding 24 months, attributing this partly to the financial unviability of build-to-sell in certain locations for developers: “your typical build-to-sell product wouldn't stack up in certain locations where you're building, so holding a product for 10 or 15 years makes more sense.” This market-driven logic, rather than policy incentives, represents an important additional pathway into BTR delivery that is distinct from the institutional investment narrative dominant in existing literature (Abidoye et al., 2023; Pawson et al., 2025; Tiwari et al., 2025). From a capital markets standpoint, BP6 contextualised Australia's development trajectory against international benchmarks, estimating the local market at approximately $20 to $25 billion compared to hundreds of billions in the UK, and characterising the sector as “about 20 years behind the US and about 10 years behind the UK” (Tiwari et al., 2025). Together, these accounts underscore that while proof of concept has been achieved, the sector remains in an early institutional phase with significant structural distance yet to be covered (Abidoye et al., 2022; Rogaris and Angeline, 2020).

Linked to the broader challenges facing Australia's rental housing system, several encouraging factors support the growing adoption of BTR, provided the underlying structural issues are addressed (Abidoye et al., 2022; Acheampong and Earl, 2020; Rogaris and Angeline, 2020). Persistent rental shortages, rapid population growth, and the declining attainability of home ownership have expanded the pool of long-term renters, particularly younger adults who are now remaining in rental housing well into their 30 and 40s (Howard et al., 2024; McKee, 2012; Ong ViforJ et al., 2025). The sector is further buoyed by interest from global institutional investors seeking residential exposure in Australia, where strong fundamentals and unmet demand present significant potential (Acheampong and Earl, 2020; EY, 2019; Tiwari et al., 2025; Tiwari and Shukla, 2024).

A recurring barrier identified in the BTR literature is limited awareness and understanding of the model among key stakeholder groups, including renters, regulators, and segments of the development industry (Abidoye et al., 2023; Nethercote, 2020). Early projects in Australia consistently faced the need to educate prospective tenants, local communities, and government agencies about how BTR differs from traditional private rentals and why it offers value beyond conventional housing pathways: “In the early days, it was a new concept, and we had to educate the community and potential residents, government agencies and regulators.” This challenge is compounded by regulatory frameworks, such as strict apartment design guidelines in jurisdictions like New South Wales, that were developed with build-to-sell (BTS) apartments in mind and therefore do not account for BTR's distinct operational model, design flexibility, or amenity-led approach. As a result, innovative features commonly found in successful international BTR markets, such as micro-apartments supported by extensive communal facilities, are difficult to implement under existing rules. From a practical standpoint, improving awareness has significant implications: planning authorities may need targeted training and clearer policy guidance, developers may benefit from structured engagement with councils and communities to build trust and understanding, and industry bodies could play a role in promoting consistent definitions and standards to accelerate acceptance of BTR as a legitimate, long-term housing typology in Australia (Abidoye et al., 2022; Swanzy-Impraim et al., 2023; Tiwari et al., 2025).

Some regulatory progress has been recorded, particularly in New South Wales, where the introduction of state-significant development application pathways for BTR projects exceeding $100 million, and the more recent Housing Delivery Authority pathway, have provided developers with greater confidence in fast-tracked assessment. BP5 acknowledged these as genuine improvements while cautioning that inconsistency across council-level planning controls continues to undermine their effect:

This account illustrates a persistent gap between state-level reform intent and local-level implementation outcomes, a pattern consistent with the regulatory fragmentation identified in the broader literature (Tiwari et al., 2025; Swanzy-Impraim et al., 2023). For planning authorities, it reinforces the case for a more nationally coherent framework that reduces the interpretive discretion councils exercise over BTR applications and ensures that state-level policy reforms translate into predictable, streamlined outcomes at the project level (Abidoye et al., 2022; Acheampong and Earl, 2020).

Another major challenge identified in the literature concerns the regulatory landscape, which remains fragmented, inconsistent, and difficult for providers and investors to navigate. Specifically, Tiwari et al. (2025) identified unfavourable tax settings, cumbersome planning processes, and limited affordable housing incentives as major impediments. Moreover, Swanzy-Impraim et al. (2023) emphasised that, in the absence of stronger government support and meaningful regulatory reform, the overall cost of delivering BTR projects remains prohibitively high. Providers across Australia shared some of these limitations imposed by regulatory frameworks, noting inconsistencies that have created uncertainty for developers and eroded confidence among global institutional investors, who compare local policy volatility and planning risk unfavourably with more stable international BTR markets. Successful adoption in major markets across the USA and the UK provides a template for improving BTR adoption as a housing solution, through a more streamlined, predictable, and nationally coherent regulatory framework that encourages long-term investment in the sector (Abidoye et al., 2022; Acheampong and Earl, 2020; Cranston, 2017). A more streamlined and nationally coherent regulatory environment, drawing on lessons from successful BTR markets in the US and UK, could reduce risk, encourage long-term investment, and support the scaling of BTR projects. For stakeholders, this underscores the importance of coordinated policy reform to facilitate stable project delivery, attract institutional capital, and enhance the contribution of BTR to Australia's rental housing supply.

Financial constraints also emerged as one of the most persistent barriers to the adoption of BTR housing, notably due to unfavourable tax settings, substantial upfront capital requirements, and limited participation by domestic institutional investors (Acheampong and Earl, 2020; Nethercote, 2020; Tiwari and Shukla, 2024). Australia's elevated construction and operation costs exacerbate these issues, while limited access to suitable financing structures and comparatively low returns often undermine project feasibility for some developers (Nethercote, 2020; Tiwari et al., 2025). These patterns align closely with provider accounts, which describe the difficulty of keeping projects viable in a market where labour, materials, and ongoing operating expenses form an unusually large cost base. Site acquisition challenges, especially in Sydney, further erode feasibility, while long mandatory holding periods limit the pool of potential investors and deter private capital. Although global investors have shown a sustained appetite for BTR housing, providers in Australia need more coordinated policy settings, targeted investment incentives, and clearer funding pathways to support the delivery of viable projects at scale.

A further structural tension concerns the relationship between project scale and market suitability. BP7 observed that the high-rise, large-format BTR projects that have dominated early Australian delivery do not necessarily align with local demographic preferences, and that smaller projects in the 50- to 100-unit range, potentially better suited to middle-ring suburban locations, currently lack the policy support and financial structuring to attract institutional interest. This creates what might be described as a scale paradox: projects large enough to attract capital and policy attention are poorly matched to the preferences of the broad Australian renter market, while projects better aligned to demand cannot access the frameworks they need to proceed. For policymakers and financial institutions, this points to the value of developing targeted incentive structures for mid-scale BTR delivery, rather than concentrating reform efforts exclusively on large institutional-grade projects (Pawson et al., 2019; Abidoye et al., 2022).

A critical success factor highlighted in both the literature and industry experience is the importance of renter support for ensuring the long-term viability of BTR projects (Abidoye et al., 2023; Pawson et al., 2019; Rogaris and Angeline, 2020). Successful adoption of the model depends not only on attracting tenants but also on sustaining stable, well-managed rental communities (Abidoye et al., 2022; Brill and Durrant, 2021). However, interview evidence shows that tenant-related dynamics can undermine operations when poorly managed. One provider noted that recruiting renters into these projects remains difficult because the model is still unfamiliar to the wider market, and prospective tenants often hold varying assumptions about what BTR should offer. This lack of awareness complicates leasing efforts and places additional pressure on operators to educate renters while simultaneously stabilising occupancy. In several cases, eagerness to fill buildings quickly led to the admission of tenants who lacked sufficient capacity to pay, which impacted long-term occupancy levels and the financial viability of BTR housing. From a practical standpoint, these tenant-related challenges underscore the need for developers and operators to embed more robust leasing and operational systems from the outset, such as tenant education strategies, stronger screening processes, and consistent communication protocols to support more stable occupancy profiles.

Community resistance, often framed through the lens of “Not in My Backyard” (NIMBY) sentiment, remains a long-standing barrier to new housing development across Australia (Gilbert and Eaton, 2007). Numerous studies highlight that while residents may support increased housing supply in principle, they frequently oppose projects proposed within their own neighbourhoods due to concerns about density, congestion, perceived changes to neighbourhood character, overshadowing, and pressure on local amenities (McKinlay et al., 2025; Williamson, 2023). Similar dynamics and attitudes have emerged for BTR projects, buoyed by a lack of understanding of what the asset class represents and limited community-wide sensitisation efforts. Despite BTR being positioned as a mechanism to increase professionally managed rental supply and ease affordability pressures, many communities remain unfamiliar with the model and often associate large-scale rental developments with transience, congestion, or declines in local amenities. Stakeholder accounts illustrate that BTR projects frequently trigger objections during development application processes, particularly when proposed on land perceived as community space or in areas with strong neighbourhood identity.

Resistance to BTR has also manifested at the political level, extending beyond localised NIMBY opposition. BP7 noted that the model has attracted ideological criticism from some political actors who frame BTR as institutionalising a “people to rent” outcome, a characterisation that conflates housing tenure with social values and complicates the policy environment for providers seeking regulatory support. This political dimension of stakeholder resistance, distinct from community-level objections, underscores the extent to which BTR challenges deeply held cultural assumptions about the primacy of homeownership in Australia (Fowler and Lipscomb, 2010; McKee, 2012; Mintah et al., 2024). In contrast, BP5 described a more constructive pathway emerging through structured community engagement requirements embedded in the state-significant DA process. This experience suggests that early, structured engagement, rather than reactive community management after opposition has crystallised, represents a more effective approach to navigating stakeholder resistance, and has direct implications for how developers sequence their community consultation activities relative to formal planning submissions (Gilbert and Eaton, 2007; McKinlay et al., 2025; Williamson, 2023).

Practically, these findings underscore that tenant engagement and community integration are critical to the long-term viability of BTR projects. Operators must go beyond merely filling units by implementing robust leasing processes, tenant education initiatives, and consistent communication strategies to stabilise occupancy and minimise financial risk. Additionally, proactive community engagement is essential to address NIMBY concerns and build acceptance of BTR developments within local neighbourhoods. For stakeholders, this highlights the practical need to invest in both operational systems and community outreach to ensure sustainable, well-managed rental communities and enhance the success of BTR as a housing model in Australia. Although international evidence notes that successful integration of BTR as a viable alternative to traditional rental housing requires favourable legislation and institutional capital (Alakeson, 2013; Carvalho et al., 2023; Nethercote, 2020), the experiences of early adopters within the Australian context also underscore the importance of an integrated approach combining tenant-focused management and community-aligned development practices.

The strategies identified in this study emerged through thematic analysis of the interview data. Rather than representing a hierarchy of priorities, these themes reflect interconnected approaches that early BTR providers are adopting to navigate the operational, regulatory, and market challenges associated with delivering purpose-built rental housing in Australia. Despite BTR developments in Australia sharing similarities with those in established markets such as the US and UK, providers noted several local differences shaping development strategies. Participants highlighted planning uncertainty, stricter lending conditions, and regulatory variation across states as key challenges affecting investment decisions. As a result, developers emphasised strategies focused on tenant retention, including leasing incentives, service-oriented management, and community engagement initiatives. Interviewees also noted that the Australian BTR sector is still developing its operational technology systems, with PropTech platforms less integrated than in more mature markets. Together, these factors demonstrate how BTR providers are adapting international models to Australia's evolving regulatory and market environment.

As the BTR sector continues to navigate planning complexities, community resistance, financing hurdles, and broader market uncertainty, providers are increasingly drawing on their early experiences to refine delivery models and strengthen the case for wider adoption in Australia. These approaches are underpinned by providers' cautious optimism and a recognition of the distinct advantages that BTR offers, both as an asset and a potential solution to housing challenges (Flaherty, 2022; Swanzy-Impraim et al., 2023; Tiwari et al., 2025).

Another key insight emerging from providers' pilot BTR projects is the critical importance of location to the success of the model, given the fine balance between the access provided by inner-city locations and cheaper access to development sites in the middle rings. According to Tiwari and Shukla (2024), London's successful integration of BTR housing stems partly from the situation of these projects on the city fringes, where renters can still access city amenities, and developers can unlock higher profit margins through reduced land costs. Although most early projects in Australia are situated in inner city suburbs (Pawson et al., 2019; Swanzy-Impraim et al., 2021), BTR providers are increasingly recognising the advantage of the city fringe locations, further buoyed by long-term work-from-home (WFH) and online shopping trends.

The financial logic underpinning location selection was further elaborated by BP5, who argued that BTR's value proposition is only commercially sustainable in areas where the rent premium over conventional alternatives is both justifiable and accessible, specifically, transport-connected and amenity-rich locations where tenants are willing to pay above-market rents: “where BTR will work moving forward is in more affluent or transport-central areas where people are willing to pay that premium and get that amenity.” This framing introduces an important affordability ceiling into the location strategy discussion that has not been fully addressed in the existing literature (Tiwari and Shukla, 2024; Pawson et al., 2019). BTR is not a universally applicable housing solution, but a viable model in specific submarkets where the premium is commercially justifiable. BP7 extended this observation by arguing that attainable rents may ultimately be the most effective long-term retention strategy, noting that current pricing structures, while reflective of high Operating Expenditure (OPEX) and Capital Expenditure (CAPEX), render the product inaccessible to a large segment of the rental market and thereby constrain the occupancy stability that institutional investors require (Nethercote, 2020; Acheampong and Earl, 2020).

As developers increasingly recognise the critical role of tenants in establishing BTR as a viable housing model, a range of tenant-focused strategies have emerged (Abidoye et al., 2023; Pawson et al., 2019; Rogaris and Angeline, 2020). Initial experiences highlighted that understanding tenant priorities is more important than simply offering additional amenities or events. As the end-users, tenant preferences and needs are critical to sustained demand, and in turn, the wider adoption of BTR housing as an alternative to traditional rentals (Brill and Durrant, 2021). Surveys consistently reveal that tenants value clean, safe, and well-managed buildings above all else, and aligning services with these core expectations significantly improves satisfaction and retention. Practical measures such as rent incentives, rent-free periods, and temporary rent freezes have proven effective in achieving occupancy, while ongoing engagement through community events and attentive management reinforces tenant loyalty. Given the nascent stage of the BTR sector in Australia, it is unclear how these incentives will affect long-term profitability. However, what is apparent from these initial strategies is that by monitoring tenants' evolving needs, providers can better align their product offerings and sustain demand.

Providers and capital markets advisors have also identified more structured, systematic approaches to sustaining tenant satisfaction beyond the leasing incentive phase. BP6 described the use of net promoter score systems to track resident experience over time, alongside transparent rent review schedules communicated to tenants well in advance of lease expiry:

This transparency in rent-setting stands in marked contrast to the opacity common in private rental markets and represents a meaningful point of differentiation for BTR as a tenure product, one that aligns with the sector's positioning around long-term landlord-tenant alignment (Brill and Durrant, 2021; Abidoye et al., 2023). At the building level, community programming has emerged as a key engagement strategy, with providers increasingly tailoring events to the demographic profile of each asset rather than applying a generic model. BP5 described culturally responsive programming at a Western Sydney project, including Eid and Ramadan night markets aligned with the area's South Asian and Middle Eastern resident base, as a compelling example of how community building can extend beyond social events to actively reflect and reinforce the identity of the resident community: “it's really bringing the community together and making it feel like it's not just a rental; it's actually their home.”

NIMBY sentiment remains a notable challenge of BTR adoption in Australia, reflecting broader societal hesitation toward higher-density or purpose-built rental developments (McKinlay et al., 2025; Williamson, 2023). Developers have encountered objections from local residents concerned about the scale, design, or perceived exclusivity of BTR projects, highlighting persistent misunderstandings and limited knowledge about the model among many stakeholders. In response, some providers have implemented strategies to better integrate BTR buildings with their surrounding neighbourhoods. Practically, this approach has improved the success of specific projects by enhancing community acceptance, reducing opposition during the planning and development phases, and fostering a sense of connection between residents and their neighbours. By creating open, accessible spaces and demonstrating long-term commitment, developers have seen higher occupancy rates, stronger tenant satisfaction, and smoother interactions with local councils. These outcomes suggest that integrating BTR developments into the existing community fabric not only mitigates NIMBY resistance but also reinforces the sustainability and social value of the model, providing a practical blueprint for future projects (Abidoye et al., 2022; Nethercote, 2020; Tiwari and Shukla, 2024).

Emerging technologies, particularly PropTech and AI, offer a promising avenue to enhance the adoption and operation of rental housing (Baum, 2017). Rogers et al. (2024) noted that PropTech is used to leverage housing and technology for profit in Australia's private rental sector, with institutional players seeking to consolidate technology use in property. Similarly, BTR providers are beginning to integrate systems that streamline property management functions, including applications, rent payments, maintenance requests, and tenant communications. AI is being used to automate routine transactions such as lease renewals, improving operational efficiency and freeing staff to focus on higher-value interactions. Despite these technological advancements, the sector in Australia still lags behind its international counterparts, often requiring multiple platforms to manage a single asset effectively. Practically, leveraging PropTech can improve tenant experience, reduce administrative burdens, and enhance overall building management, but these gains must be complemented by continued human engagement and proactive community integration to ensure long-term success and acceptance of BTR projects.

Beyond platform integration, BP5 highlighted an emerging application of operational data across BTR portfolios to inform future asset design, specifically, tracking amenity usage patterns across different demographic submarkets to guide capital allocation in subsequent projects:

This data-driven approach to amenity design represents a maturation of PropTech application in the Australian BTR context, moving beyond transactional efficiency toward strategic asset intelligence that can meaningfully improve long-term financial performance (Baum, 2017; Rogers et al., 2024). However, BP7 cautioned that technological and operational improvements risk being undermined by internal organisational silos between acquisition, development and operations teams. When the assumptions embedded at acquisition regarding rents, stabilisation timelines, and operating costs are not stress-tested by and shared with operational teams, the result is a structural misalignment that surfaces as underperformance once assets reach operations. Breaking down these silos and ensuring cohesive collaboration across all three functions from project inception was identified as a critical but underappreciated organisational strategy for improving the long-term viability of BTR delivery in Australia (Flaherty, 2022; Swanzy-Impraim et al., 2023).

Broadly, the experiences of early BTR providers in Australia highlight several practical implications for stakeholders. Developers should carefully consider project location, balancing proximity to city amenities with more affordable city-fringe sites to optimise both occupancy and financial viability. Tenant-focused strategies, including rent incentives, responsive management, and ongoing community engagement, are critical for sustaining demand and ensuring long-term occupancy. At the same time, proactive measures to integrate BTR projects with surrounding neighbourhoods can reduce NIMBY resistance, enhance community acceptance, and support smoother planning and development processes. Collectively, these insights suggest that the successful adoption of BTR in Australia depends on an integrated approach that combines location strategy, tenant-centred management, and community-aligned development practices to strengthen the sector's viability and social value.

Australia's housing market continues to face significant structural pressures, including chronic undersupply, declining affordability, and a private rental sector characterised by fragmentation, inconsistent standards, and limited security of tenure. BTR housing has emerged internationally as a viable model capable of delivering professionally managed, institutionally financed rental housing at scale, but its adoption in Australia has been slow, constrained by financial, regulatory, and operational uncertainties. Existing research has largely examined BTR through the lenses of policy design, financial viability, or tenant preferences, leaving a clear gap in understanding how providers themselves navigate the early challenges of delivering BTR in the Australian context. This study addressed this gap by examining the practical, on-the-ground experiences of BTR providers, focusing on the operational barriers they encounter and the strategies they have implemented to overcome them. In doing so, the research contributes new empirical insight into how BTR is being shaped at an early stage of market development and what lessons can support its wider adoption as a mainstream housing option.

This investigation was guided by an exploratory qualitative research design involving in-depth interviews with BTR providers actively engaged in the planning, delivery, and management of projects across Australia. Seven purposively sampled BTR providers were interviewed for this study, following which their perspectives were thematically analysed to identify underlying themes. The analysis centred on identifying the key constraints impeding BTR growth, including regulatory uncertainty, financing hurdles, planning delays, and tenant dynamics, as well as the strategies providers are already implementing to address these issues. This evidence-based approach ensures that the findings reflect real operational practice rather than speculative industry expectations, offering a grounded assessment of the opportunities and pressures shaping the sector's evolution.

The experiences of the providers highlight the absence of a national framework for BTR adoption, underscored by their varied challenges across different cities and renter groups. Awareness of the model remains a paramount challenge for both prospective tenants and regulatory authorities. Consequently, proposals for BTR projects are assessed using the same frameworks as traditional developments, with little room for concessions that have streamlined delivery overseas. Financially, unfavourable tax settings, high upfront capital requirements, and limited institutional investment appetite, particularly for development-stage risk, constrain the pipeline of new projects. Regulatory uncertainty around planning approvals, zoning inconsistencies, and varying local council expectations further adds time, cost, and risk to development. At the market level, concerns were raised that BTR, in its current form, disproportionately serves internationally mobile and transient residents rather than the broader domestic rental market, raising questions about the model's capacity to address mainstream housing affordability. Operationally, developers must overcome early market misconceptions about BTR, navigate tenant acquisition in a relatively unfamiliar product segment, and address community resistance driven by NIMBYism and limited understanding of the model.

Despite these restrictive challenges, there is still some optimism among developers on the prospects of BTR housing as a long-term solution in Australia. Innovative strategies to navigate these barriers include diversifying funding sources, unlocking more value in middle-ring locations, refining operating models to emphasise community and service quality, improving design efficiencies to reduce lifecycle costs, and strengthening stakeholder engagement with tenants, planners, and local communities. These innovative strategies can provide a blueprint for developers still uncertain about the viability of BTR housing in the Australian context. However, regulatory and financial constraints require a more coordinated framework to support BTR growth as a solution for Australia's long-term rental housing challenges.

While this study provides important and timely insights into the state of BTR housing in Australia, some limitations offer promising directions for future research. The qualitative research design, though offering depth and contextual understanding, draws on a sample of providers concentrated primarily in the development and advisory segments of the industry, which constrains the generalisability of the findings across the full spectrum of BTR stakeholders and market participants. The research also captures perspectives at a single point in time within a rapidly shifting policy and market environment, meaning that future regulatory changes, financing conditions, or investor behaviour may significantly alter the landscape. Given that yield performance and long-term return expectations remain key considerations for institutional capital, future research could also explore the financial and policy conditions needed to enhance the attractiveness of BTR investments. Moreover, renters' perspectives on BTR projects are critical to better align developments in the pipeline with end users’ needs. As the sector matures, ongoing empirical research will be essential for refining operational frameworks, informing policy development, and supporting the establishment of BTR as a stable and high-quality component of Australia's housing system. Although this study provides a focused exploration of providers' perspectives, the views of other stakeholders in the BTR industry may also be critical to developing a long-term roadmap for its adoption in the Australian market, particularly those of investors and renters.

This research is part of a larger research project that investigates the emergence of BTR housing model in Australia, from which other papers will be published with a different research objectives/scope but sharing the same background.