Australia’s build-to-rent (BTR) sector continues to grow, with Victoria, New South Wales and Queensland leading the way, but momentum may slow in 2026 as developers face feasibility challenges.
At the same time, the NSW Government has announced construction has begun on a major new BTR project in Bomaderry, aimed at easing rental stress on the South Coast.
According to Knight Frank’s Australia Build to Rent Update Q3 2025, Victoria remains the most advanced BTR market with 13,198 units either completed or under construction and another 12,632 in the pipeline, bringing its total pipeline to 25,829 units.
New South Wales follows with 5,335 units completed or under construction and 16,690 more in the pipeline, totalling 22,025.
Queensland sits close behind with 4,157 units delivered or underway and a further 12,122 in the pipeline, for a total of 16,279.
Other states and territories have more modest pipelines: the ACT has 2,824 BTR units either delivered, under construction or planned, Western Australia 2,119, and South Australia 1,269.
Knight Frank forecasts development completions will peak at record levels in 2025 before tapering off to around 4,000 units in 2026.
Partner John-Paul Stichbury said the slowdown reflects recent feasibility issues, but market conditions are stabilising with easing build cost inflation, falling interest rates and improved access to capital.
“Attention has now turned to stimulating the next wave of growth,” he said.
“There are around 20,500 units already at DA-approved stage but not yet commenced. Unlocking these projects will be critical to sustaining growth.”
Government policy is also shaping the future of the sector. In NSW, a permanent 50 per cent land tax exemption was recently introduced.
Knight Frank’s Head of Alternatives, Tim Holtsbaum, said supportive measures such as this, alongside changes to MIT legislation, were improving the investment environment, though he noted that foreign investor tax settings and the lack of national uniformity remain challenges.
NSW South Coast Project Underway
Against this national backdrop, the Minns Labor Government has announced construction has started on a 60-unit BTR project in Bomaderry.
Delivered by Zauner Construction, the development at 4 Bienda Street will include 48 homes for long-term rental at market rates and 12 homes set aside for very low to moderate-income households.
Funded through a $65 million state investment to boost secure rental housing in the South Coast and Northern Rivers, the Bomaderry project was an election commitment in 2023 and is due for completion by late next year.
Premier Chris Minns said the project would provide “secure and affordable homes for young people and families to rent” and help ease rental stress in a region where nearly half of households are under pressure.
Planning Minister Paul Scully emphasised that with more than a third of households renting in the Nowra-Bomaderry area, BTR developments were vital to improving housing choice.
