The View | Is build to rent the answer to Asia’s housing problems? Not so fast
- Rental housing is an attractive investment in a recessionary environment, and benefits from pandemic-induced concerns about future demand for office properties
- However, the interests of corporate landlords may still conflict with those of governments, which are under pressure to lower the cost of housing
House prices rose almost 20 per cent in the 12 months through to the end of January, fuelled by record low interest rates. The political imperative to address concerns about the housing market – not just rapidly eroding affordability, but also the factors contributing to the chronic shortage of reasonably priced and decent housing – is evident across the world, but is particularly pronounced in Asia.
Unsustainable growth in house prices is one of the key drivers of demand for private rented accommodation, along with urbanisation, shifts in demographics, and the fact that younger generations in Asia are taking longer to settle down and start families.
The multifamily sector – apartments that have been built and designed specifically for the demands of the private rented sector, and are professionally managed and leased to a variety of tenants – is well established in the United States, and has grown rapidly in Britain, where it is known as build-to-rent, over the past several years.
According to real estate consultant RCA, apartments cemented their dominance of US commercial property investment activity last year, accounting for nearly 40 per cent of transaction volumes.