Marcus Tole
Commercial Property Analyst
Christian Finianos
Commercial Property Researcher
As Western Sydney continues to grow at record pace, the Build-to-Rent (BTR) model is emerging as a viable alternative to traditional build-to-sell projects. With affordability pressures mounting, construction costs still high, and population growth driving unprecedented rental demand, developers are re-examining what kind of projects make the most sense in today’s environment, and whether BTR might help deliver a more sustainable housing future.
According to realestate.com.au, there were around 9,180 operational BTR apartments in Australia as of late 2024, with a further 8,199 under construction and over 17,000 approved, a sharp increase compared to only a few years ago. The federal government has also introduced tax incentives and new regulations to unlock up to 80,000 BTR homes nationwide, aiming to ease the housing shortage.
Major institutional players such as Mirvac and Lendlease have led the charge, focusing on urban precincts with strong rental demand, while Landcom has partnered with private developers to deliver BTR projects that improve housing diversity and affordability.
Source: https://www.realestate.com.au/advice/build-to-rent/
While early BTR projects have clustered around inner-city precincts, developers are now looking westward. Land availability, lower site costs, and strong tenant demand make Western Sydney an appealing target for rental-led models, particularly across Parramatta, Liverpool, and Penrith. Demand is also rising for build-to-rent apartments in Western Sydney as renters look for professionally managed long-term accommodation options.
As Peter Vines, Managing Director of RWC Western Sydney, explains:
“Developers are becoming more pragmatic. In some locations, sales prices don’t justify construction costs, so rather than waiting for the pre-sale market to improve, many are assessing Build-to-Rent as a more stable, long-term play.”
In Western Sydney, where GRVs have softened in select growth corridors, BTR can provide a more viable development pathway. “In pockets like parts of the South West or North West, sales rates per square metre are still below replacement cost,” notes Joseph Assaf, Director at RWC Western Sydney.
“That’s where Build-to-Rent or hybrid models, including boarding houses, co-living, or retained unit blocks, can outperform build-to-sell because they generate ongoing income instead of chasing margin on the first sale.”
However, the picture isn’t uniform across the metropolitan region. In established hubs across the Hills Shire, Inner West, North Shore, and Eastern Suburbs, stronger GRVs and limited new supply mean traditional build-to-sell projects remain feasible. Developers in these precincts are still achieving solid absorption rates and steady pricing, particularly for boutique apartment projects with strong owner-occupier demand.
But delivery remains challenging. Construction costs, borrowing rates, and yield compression continue to limit feasibility. Developers entering the space must evaluate site selection, scale, and funding structures carefully to achieve viable returns.
Located directly opposite Parramatta Train Station, the project will offer seamless connectivity to Westfield Parramatta and the broader CBD precinct. The inclusion of a major hotel brand alongside purpose-built rental apartments reflects the growing appetite for long-term investment and amenity-rich rental housing in Sydney’s “second CBD.”
For developers, this type of mixed-use approach highlights how Build-to-Rent can become a viable strategy in high-growth corridors, particularly when combined with commercial and hospitality components that enhance the precinct’s amenity and appeal. It also reinforces the growing institutional confidence in Parramatta’s role as the commercial and residential heart of Western Sydney.
Source: https://www.commercialrealestate.com.au/news/upmarket-crowne-plaza-parramatta-slated-for-sydneys-second-cbd-2-1448228/
For developers, the key is understanding where each model works best.
“In areas where GRVs are too low to justify immediate resale, Build-to-Rent delivers a steady, bankable income stream,” adds Peter Vines. “But in stronger pockets, build-to-sell still performs exceptionally well, especially when you’re delivering quality stock in supply-constrained markets.”
At RWC Western Sydney, the team believes both models will play critical roles in addressing the region’s housing needs. As infrastructure and population growth continue to expand, the region is poised to attract both institutional investors seeking long-term income and private developers focused on resale-driven projects.
In the end, Build-to-Rent in NSW isn’t the only future, but it may play a major part in Western Sydney’s housing market, particularly in growth corridors where the traditional build-to-sell model faces viability constraints, but it is unlikely to fully replace other forms of residential development. Instead, it will sit alongside them, offering a complementary pathway to meet the region’s evolving housing demands.
What Is Build-to-Rent — and Why It’s Gaining Traction
In simple terms, Build-to-Rent refers to purpose-built developments retained by the developer or institutional investor and operated as long-term assets in NSW’s rental market, rather than sold off to individual buyers. This model is often referred to as build-to-rent housing or build-to-rent development, especially when discussed in planning, policy and investment contexts.According to realestate.com.au, there were around 9,180 operational BTR apartments in Australia as of late 2024, with a further 8,199 under construction and over 17,000 approved, a sharp increase compared to only a few years ago. The federal government has also introduced tax incentives and new regulations to unlock up to 80,000 BTR homes nationwide, aiming to ease the housing shortage.
Major institutional players such as Mirvac and Lendlease have led the charge, focusing on urban precincts with strong rental demand, while Landcom has partnered with private developers to deliver BTR projects that improve housing diversity and affordability.
Source: https://www.realestate.com.au/advice/build-to-rent/
The Build-to-Rent Opportunity in Western Sydney
Western Sydney represents the next frontier for Build-to-Rent (BTR). The region’s expanding population, forecast to exceed 3 million residents by 2036, and major infrastructure projects such as the Western Sydney Airport and Metro West are reshaping housing demand.While early BTR projects have clustered around inner-city precincts, developers are now looking westward. Land availability, lower site costs, and strong tenant demand make Western Sydney an appealing target for rental-led models, particularly across Parramatta, Liverpool, and Penrith. Demand is also rising for build-to-rent apartments in Western Sydney as renters look for professionally managed long-term accommodation options.
As Peter Vines, Managing Director of RWC Western Sydney, explains:
“Developers are becoming more pragmatic. In some locations, sales prices don’t justify construction costs, so rather than waiting for the pre-sale market to improve, many are assessing Build-to-Rent as a more stable, long-term play.”
Build-to-Rent vs Build-to-Sell: A Feasibility Shift
While both models share a common foundation in residential development, the financial drivers differ significantly.- Build-to-Sell relies on strong pre-sales and high gross realisation values (GRVs) to fund construction.
- Build-to-Rent, by contrast, focuses on long-term rental income and yield performance rather than immediate resale.
In Western Sydney, where GRVs have softened in select growth corridors, BTR can provide a more viable development pathway. “In pockets like parts of the South West or North West, sales rates per square metre are still below replacement cost,” notes Joseph Assaf, Director at RWC Western Sydney.
“That’s where Build-to-Rent or hybrid models, including boarding houses, co-living, or retained unit blocks, can outperform build-to-sell because they generate ongoing income instead of chasing margin on the first sale.”
However, the picture isn’t uniform across the metropolitan region. In established hubs across the Hills Shire, Inner West, North Shore, and Eastern Suburbs, stronger GRVs and limited new supply mean traditional build-to-sell projects remain feasible. Developers in these precincts are still achieving solid absorption rates and steady pricing, particularly for boutique apartment projects with strong owner-occupier demand.
Market Drivers and Government Support in NSW
The NSW Government’s continued push to increase housing supply through diverse models has positioned BTR as part of the long-term solution. The model offers key benefits, including:- Long-term ownership stability and professional management;
- Consistent income streams less exposed to market volatility; and
- A pathway to deliver affordable, high-quality housing at scale.
But delivery remains challenging. Construction costs, borrowing rates, and yield compression continue to limit feasibility. Developers entering the space must evaluate site selection, scale, and funding structures carefully to achieve viable returns.
Case Study – Crowne Plaza Parramatta Build-to-Rent Precinct
One of the standout developments in Western Sydney’s rental-led shift is the project by Urban Property Group at Fitzwilliam Street, Parramatta. The scheme features a 217-room Crowne Plaza hotel anchored within a larger mixed-use development, which also includes 703 apartments, mostly built-to-rent, alongside affordable housing and units for people with disabilities.Located directly opposite Parramatta Train Station, the project will offer seamless connectivity to Westfield Parramatta and the broader CBD precinct. The inclusion of a major hotel brand alongside purpose-built rental apartments reflects the growing appetite for long-term investment and amenity-rich rental housing in Sydney’s “second CBD.”
For developers, this type of mixed-use approach highlights how Build-to-Rent can become a viable strategy in high-growth corridors, particularly when combined with commercial and hospitality components that enhance the precinct’s amenity and appeal. It also reinforces the growing institutional confidence in Parramatta’s role as the commercial and residential heart of Western Sydney.
Source: https://www.commercialrealestate.com.au/news/upmarket-crowne-plaza-parramatta-slated-for-sydneys-second-cbd-2-1448228/
The Outlook: A Hybrid Market Ahead
Western Sydney’s housing future is unlikely to be defined by one model alone. Instead, a hybrid market is emerging, one where Build-to-Rent, boarding houses, co-living, and retained unit-block strategies coexist alongside traditional build-to-sell developments.For developers, the key is understanding where each model works best.
“In areas where GRVs are too low to justify immediate resale, Build-to-Rent delivers a steady, bankable income stream,” adds Peter Vines. “But in stronger pockets, build-to-sell still performs exceptionally well, especially when you’re delivering quality stock in supply-constrained markets.”
At RWC Western Sydney, the team believes both models will play critical roles in addressing the region’s housing needs. As infrastructure and population growth continue to expand, the region is poised to attract both institutional investors seeking long-term income and private developers focused on resale-driven projects.
In the end, Build-to-Rent in NSW isn’t the only future, but it may play a major part in Western Sydney’s housing market, particularly in growth corridors where the traditional build-to-sell model faces viability constraints, but it is unlikely to fully replace other forms of residential development. Instead, it will sit alongside them, offering a complementary pathway to meet the region’s evolving housing demands.
Sources
- Unpacking the Build-to-Rent Boom – realestate.com.au
- Build-to-Rent: Where’s the Market Heading? – NDY
- Could Build-to-Rent Fix Australia’s Housing Crisis? – ABC News
- Housing Peak Bodies Welcome Regulations to Unlock 80,000 Build-to-Rent Homes – Property Council of Australia
- Build-to-Rent: What You Need to Know – Canstar
- Landcom Build-to-Rent Program – Landcom
- Build-to-Rent Development Tax Incentives – Australian Taxation Office (ATO)
- The Rise of Build-to-Rent in Australia – Lendlease
- Mirvac Build-to-Rent Portfolio – Mirvac
- Upmarket Crowne Plaza Parramatta Slated for Sydney’s Second CBD – AFR