The model for delivering residential assets in Australia is changing. Investor and consumer objectives have combined to make market conditions supportive of multifamily residential. In Australia, debate centres around four elements: a new product paradigm; investor return requirements; customer value proposition; policy initiatives. As these elements are increasingly accepted, we expect to see more investors seeking opportunity in multifamily investment.
Multifamily is a new product on the risk-return continuum combining both residential development and investment holding. It de-risks traditional development and meets renter need for high quality/high service rental accommodation – increasingly important as purchase economics diminish.
Multifamily provides a new funding model for residential delivery which shifts the model from intermediated debt finance.
In the US, multifamily is the second largest property asset class after office. If the Australian market evolves per the US, then there is potential for a $300b investment market, or 300,000 apartments by 2036.