There’s the smell of freshly made coffee and baking cookies wafting through the doorway of a building boasting rental apartments inside, writes Sue Williams, in a recent article in Domain.
A woman comes out to welcome potential renters, does the COVID-19 checks, and then whisks us all off on a complete tour of the various apartments and their different floorplates and views.
There are stops along the way at the communal gyms, dining room, library, theatre, co-working room, kiddies’ playroom and lounge and, just to keep up our strength, we’re offered raspberry, blueberry and coconut smoothies, salmon poke bowls, coffee, salted caramel tarts and popcorn.
Admittedly, the open day, which featured in a recent Flat Chat Wrap Podcast and conducted in a flurry of food, friendliness and fabulous amenities, was a special occasion.
But I can’t help drawing comparisons with the dreary drudgery of normal rental inspections when, an hour later, I’m standing on another street in another Sydney suburb in the biting wind, waiting to inspect an individual rental apartment.
With this one, the doorbell doesn’t work, and the agent’s board outside doesn’t offer a phone number. After a 15-minute wait, I finally give up and leave.
It’s a tale of two types of residential apartment rentals in a country that, until now, has offered only one.
But now competing against the traditional private landlord’s apartment in a regular strata building is a brand new model: a developer offering private leases on apartments in Australia’s first purpose-built rental blocks that cut out the agents and the owners’ corporation.
It’s a different way of looking at renting and tentants and you can only hope it might even prompt investor-owners to lift their game .
“There’s some pretty low-hanging fruit in the rental sector and renting is often not a great experience for many people,” said Andrew Hansen, Mirvac’s national director of operations for build-to-rent. “But we want the rental sector to grow, and get a great reputation.
“We hope we’re putting pressure on the sector to offer a better quality service and give those people who pay around 30 to 40 per cent of their income on rent a better experience. We’re hoping to change people’s attitudes to renting in Australia.
“A growing number of people are choosing to rent, and it’s a lifestyle choice. Rather than ownership and paying off a mortgage, you might prefer to invest in your business or buy stocks or put money in other places. There have even been some studies that have suggested you’re better off financially in the long term renting rather than buying.”
The 315 apartments in the 23-level and nine-level rental blocks, called LIV Indigo, stand side-by-side with the two other buildings of apartments for sale in Mirvac’s four-tower Pavilions project in Sydney Olympic Park.
They’re the first of a bulging pipeline of build-to-rent apartments, with Mirvac alone planning 1400 over three projects in Melbourne, 400 in Brisbane and looking at further sites in Sydney on the city fringes, around Redfern, Waterloo, Alexandria and Green Square.
Unlike with privately leased apartments, with these there’s no bond payable, the minimum lease is for 12 months – with the option to renew indefinitely – and residents can paint walls, hang pictures, and keep pets. The apartments also come fully equipped with all new white goods, free gas, electricity and Wi-Fi, and free use of all the communal amenities.
There’s no strata plan, so no owners’ committee to decide policy, instead there’s a monthly social evening with Mirvac staff to make any suggestions on the running of the place. In addition, there’s a maintenance team on site for any repairs needed, and a site team to welcome residents, offer any help necessary and organise community events.
“We really love the community aspect of it,” said Leigh Harlett, 27, who moved into one of the 100 units already rented with her partner Elliot Almario, 26, and their dog Sheba in September. “The building is lovely and the facilities are amazing, but the people are all so friendly and welcoming.”
The apartments aren’t cheap, however, starting at $535 a week for a one-bedroom apartment, $615 for a two-bedroom and $1000 for a three-bedroom; between 10 per cent and 30 per cent more than private rentals in the same area. Rental increases will reflect market conditions, and will never be above 4 per cent a year.
“I think it’s brilliant!” said another person looking at the apartments, Belinda Brown, 61. “But it’s a bit too pricey for us. We need three bedrooms, and that’s too much.”
Mr Hansen believes it’s a good value proposition, however. “When you break down the value of everything we’re offering, like the white goods, no bond and the amenities ‘on steroids’, any premium you’re paying quickly dissolves,” he said. “We’re delivering high-quality apartments for renters only which is a new category of housing.”
To compare, I check out a one-bedroom apartment in Potts Point that’s for rent for $90 less than a one-bedroom at LIV.
I wait outside and then trudge around the small, dingy, unrenovated interior, looking out at brick walls, and feeling depressed. I look at the queues to view other apartments, being rushed in four at a time for the 15-minute openings, compared to the inspections that have been known to last four hours at LIV.
So far, the tenants moving in to Liv have ranged from a two-year-old in a family to a couple in their 80s, from singles and couples in their 20s to downsizers selling up to realise the equity in their homes and renting.
“We’ve had people even coming from interstate, the local area, the Central Coast and even the eastern suburbs of Sydney, like from Bondi Beach and Vaucluse,” said Anthony Garagounis, Mirvac national manager for delivery build-to-rent. “A lot of people are being drawn to this concept.”