Superannuation funds and other institutional investors have not had enough incentive to invest in affordable housing in Australia, according to the Federal Treasurer, Scott Morrison.
Addressing an Australian Council of Social Services (ACOSS) event in Victoria, Morrison said the Government recognised the need to provide greater incentives for investment.
“To build more homes, we need to unleash the supply of affordable housing and pave the way for more institutional and private investment,” he said. “Easing housing affordability should not just be our job, but a sound investment of corporate and private investors. We just need to ensure there are enough incentives and the return on investment for institutions to be encouraged to invest.”
Morrison said it had been a great disappointment to the Government that there had been virtually no increase in affordable housing over the last decade in Australia.
“But clearly there hasn’t been enough incentives to attract private capital, institutional capital, and superannuation funds into the market,” he said. “Devoid of options here in Australia, our own super funds are investing in affordable housing in the United Kingdom. We need them to invest in such projects here.”
“Therefore we will establish a new National Housing Finance and Investment Corporation by 1 July next year. NHFIC will operate an affordable housing bond aggregator to provide long-term low-cost finance for affordable housing providers, giving investors the confidence to invest in the sector,” the Treasurer said.
Morrison pointed out that from 1 July 2017, managed investment trusts would be able to acquire, construct, or redevelop affordable housing to hold for rent.
“These reforms will provide foreign and domestic investors, including superannuation funds, with a new way of accessing long-term, stable investments in the property sector and lead to more affordable housing,” he said.