Build to Rent (BtR) in the regions

Australia’s housing challenge is well documented: strong demand, limited supply, and a rental market under sustained pressure. Build to Rent (BtR) has emerged as a compelling alternative by delivering professionally managed, long-term rental housing at scale. 

Unlike traditional developments with private strata arrangements, BtR consolidates ownership under a single institutional investor. This can streamline maintenance, improve tenant experience and tenure, and enable more consistent operational performance through scale. As the BtR sector matures, it is increasingly recognised as a key component of Australia’s housing mix, backed by growing capital and a rapidly expanding pipeline. In fact, the sector is entering a period of expansion, with cumulative operating apartments increasing from just over 9,000 in 2024 to more than 46,000 by 2029, as reported in BDO’s 2026 Build to Rent report.  

But while the model is gaining traction across east-coast markets, the question remains on whether BtR can work in regional Australia.  

BtR remains in the city for now 

To date, Australia’s BtR sector has been concentrated in Melbourne and Sydney, with selective expansion into Brisbane and Perth. This reflects the way institutional capital currently operates. BtR is still a relatively new asset class in Australia, and investors have understandably focused on locations that offer scale, liquidity, and proven demand. Large metropolitan markets provide the depth required to support major developments, often averaging several hundred apartments per project to allow investors to deploy significant capital efficiently. 

On the contrary, regional markets are structurally constrained by their smaller population base and lower density in regional centres, creating hurdles to deliver projects at scale. In many cases, developments of 300 apartments or more, a common benchmark in capital cities, are simply not feasible in regional locations. 

Additionally, investor appetite has historically been influenced by planning settings, tax treatment and construction feasibility, which have tended to favour larger, more established urban markets. 

Is change underway? 

With more projects completed and platforms scaling, Australia’s BtR market is moving into a period of operational maturity. Institutional investors are gaining confidence in the asset class as a long-term income-generating strategy. 

As portfolios grow, investors are increasingly looking to diversify geographically and spread risk across multiple markets, which may have implications for regional Australia. 

We are already seeing early signs of this transition, with smaller-format BtR developments beginning to emerge. Projects in regional centres such as Townsville demonstrate that the model can be adapted to local market conditions where there is sufficient demand and the right economic drivers. Another example of regional viability is led by NSW Government developer, Landcom, which recently broke ground on 50 new BtR homes in East Lismore. 

At the same time, demographic trends are strengthening the case for regional expansion. Population growth in regional centres, driven in part by changing work patterns and lifestyle preferences, is creating new pockets of rental demand outside the capital cities. Together, these shifts suggest the next phase of BtR growth may not solely be defined by major metropolitan markets. 

What needs to change for regional BtR to scale 

Despite this momentum, regional BtR is unlikely to follow the same blueprint as the capital cities. For the model to succeed outside major hubs, several factors will need to align: 

• Right-sized developments: The emergence of smaller projects – potentially in the range of 100 to 150 apartments – will be critical in making regional BtR viable. 
• New capital strategies: Institutional investors may need to adapt their deployment models, moving away from large single-asset investments towards aggregated or portfolio-based regional plays. 
• Local demand drivers: Strong underlying demand remains essential, particularly in regions experiencing population growth, workforce shortages, or housing stress. 
• Supportive policy settings: Planning frameworks, tax treatment and infrastructure investment will continue to shape where BtR can be delivered at scale. 

Importantly, regional markets are not homogenous, with performance and suitability varying by location. Cities such as Geelong, Newcastle, Cairns and Mackay are already emerging as potential candidates due to their size, economic diversity, and connectivity to capital cities. 

The long-term outlook may present a more balanced portfolio

It’s unlikely that BtR will remain confined to Australia’s capital cities. As the sector matures and portfolios scale, BtR investment is expected to mirror Australia’s population distribution. That suggests a future where regional assets form part of a diversified, national BtR portfolio, complementing core holdings in major cities.  

However, the path to regional expansion will be gradual, shaped by evolving capital strategies, project feasibility and local market dynamics. 

BtR has already proven its value in addressing housing supply challenges in Australia’s largest cities. The next challenge and opportunity is determining how to provide value for regional communities. For investors and policymakers alike, the question is no longer if BtR will reach the regions – but when, and how. 

For a deeper dive into the Build to Rent market, including pipeline maturity, policy impacts and how regional Australia fits into the national rebalancing of capital, read BDO’s 2026 Build to Rent report.