Barriers to institutional investment in rental housing: a systematic review of market risks.

Swanzy-Impraim, S; Ge, XJ; Mangioni, V

Barriers to institutional investment in rental housing: a systematic review of market risks.

Swanzy-Impraim, S

Ge, XJ Mangioni, V

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Publisher:: Penerbit UTM Press.
Publication Type:: Journal Article
Citation:: International Journal of Real Estate Studies, 2021, 15, (2), pp. 1-15
Issue Date:: 2021-12-16

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Field	Value	Language
dc.contributor.author	Swanzy-Impraim, S https://orcid.org/0000-0002-7709-7889
dc.contributor.author	Ge, XJ
dc.contributor.author	Mangioni, V
dc.date.accessioned	2022-01-01T00:16:16Z
dc.date.available	2021-08-22
dc.date.available	2022-01-01T00:16:16Z
dc.date.issued	2021-12-16
dc.identifier.citation	International Journal of Real Estate Studies, 2021, 15, (2), pp. 1-15
dc.identifier.issn	2231-7643
dc.identifier.uri	http://hdl.handle.net/10453/152578
dc.description.abstract	Housing practitioners and policy experts are advocating for an expansion in rental housing supply in contemporary cities around the world. The objective is to convince institutional investors to include rental housing investment in their investment portfolio to contribute to boosting housing supply. Unfortunately, the rental sector is characterized by numerous uncertainties and challenges, making it unattractive to institutional investors. With the growing attention to institutional investors in various housing market contexts, an understanding of the market risks (also known as barriers), is useful to inform future research and policymaking. Using a systematic literature review methodology, this paper synthesizes the extant literature on the market risks inhibiting institutional investment in rental housing. The review finds the following barriers: low profitability, non-progressive rent control policies, unclear target group for rented projects, poor landlord-tenant relations, inadequate property management and unreliable property market information. Among all the barriers identified, low profitability and inadequate property management had great influence on their investment decision. Firstly, institutional investors perceive rental housing investment as less profitable and unattractive in terms of project performance. Secondly, the lack of supporting structures for the property management sector contributes to derailing rental yields. Furthermore, the review finds that the position of policymakers on target grouping was unclear for projects under government assistance. In view of the identified barriers, this paper concludes that, although the idea of expanding rental housing supply seems laudable, ignoring these problems may be detrimental to housing markets in the long run. Rental markets in many countries are volatile, and not ready to receive institutional investors fully into the sector. An expanded rental sector could be improved or advanced if policy makers take the appropriate steps to resolve the identified challenges and make adequate structural preparations for large scale rental housing supply.
dc.language	en
dc.publisher	Penerbit UTM Press.
dc.relation.ispartof	International Journal of Real Estate Studies
dc.rights	info:eu-repo/semantics/openAccess
dc.title	Barriers to institutional investment in rental housing: a systematic review of market risks.
dc.type	Journal Article
utslib.citation.volume	15
utslib.location.activity	Malaysia
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/DVC (Teaching and Learning)
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building
pubs.organisational-group	/University of Technology Sydney/Faculty of Design, Architecture and Building/School of Built Environment
utslib.copyright.status	open_access	*
pubs.consider-herdc	true
dc.date.updated	2022-01-01T00:16:14Z
pubs.issue	2
pubs.publication-status	Accepted
pubs.volume	15
utslib.citation.issue	2

Abstract:

Housing practitioners and policy experts are advocating for an expansion in rental housing supply in contemporary cities around the world. The objective is to convince institutional investors to include rental housing investment in their investment portfolio to contribute to boosting housing supply. Unfortunately, the rental sector is characterized by numerous uncertainties and challenges, making it unattractive to institutional investors. With the growing attention to institutional investors in various housing market contexts, an understanding of the market risks (also known as barriers), is useful to inform future research and policymaking. Using a systematic literature review methodology, this paper synthesizes the extant literature on the market risks inhibiting institutional investment in rental housing. The review finds the following barriers: low profitability, non-progressive rent control policies, unclear target group for rented projects, poor landlord-tenant relations, inadequate property management and unreliable property market information. Among all the barriers identified, low profitability and inadequate property management had great influence on their investment decision. Firstly, institutional investors perceive rental housing investment as less profitable and unattractive in terms of project performance. Secondly, the lack of supporting structures for the property management sector contributes to derailing rental yields. Furthermore, the review finds that the position of policymakers on target grouping was unclear for projects under government assistance. In view of the identified barriers, this paper concludes that, although the idea of expanding rental housing supply seems laudable, ignoring these problems may be detrimental to housing markets in the long run. Rental markets in many countries are volatile, and not ready to receive institutional investors fully into the sector. An expanded rental sector could be improved or advanced if policy makers take the appropriate steps to resolve the identified challenges and make adequate structural preparations for large scale rental housing supply.

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http://hdl.handle.net/10453/152578