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Finance Investment, Political

HAFF opens door to more super investment in affordable housing

Industry Super Australia 2 mins read

Industry Super Australia welcomes the passage of the Government’s Housing Bills today, which establishes the $10 billion Housing Australia Future Fund (HAFF) with the support of the Greens and cross bench Senators and Members.  

The HAFF along with the Accord will support a pipeline of 40,000 social and affordable dwellings over the next five years providing critical scale and certainty needed by institutional investors.  

Coupled with reforms to planning and access to well-located land, super funds are now much better placed to deploy capital in new social and affordable housing supply while meeting the best financial interests of super fund members.  

The amendments agreed to, and extra investment secured through negotiations, improve investability for super funds, through guaranteeing recurrent expenditure and ensuring indexation of HAFF distributions available to support long term investment in new social and affordable dwellings.  

These changes have been critical to ensuring finance from institutional investors can be structured on terms that are executable and satisfy the best financial interests of members. 

Coupled with the promised reforms delivering accelerated planning pathways, land release, precinct development opportunities, support for build to rent, and addressing other regulatory impediments - there is now a viable pathway for super funds to invest in significant additional housing supply across the affordability spectrum. 

Right now, just 4% of Australia’s housing stock is classified as affordable, giving Australia the lowest proportion of social housing among OECD nations – even though public spending on housing allowances is at the OECD average.  

Overseas institutional investors have found enough viable affordable housing projects to invest at scale, but in Australia investment to date has been smaller and more fragmented.  

By removing the market and regulatory hurdles that have inhibited private investment to date, the HAFF, Accord and associated reforms can help reverse a decades-long shortfall in housing-sector investment by institutional investors. 

ISA congratulates federal parliamentarians on reaching agreement to delivering this important initiative and working with the Community Housing Sector to deliver critically needed housing stock.  

Comments attributable to Industry Super Australia Deputy Chief Executive Matt Linden: 

“Today’s passage of the Housing Bills provides much needed certainty to super funds who are looking to invest at scale in social and affordable housing.”  

“Funds can now proceed with confidence to assess project pipelines and assess how to deliver good risk-adjusted returns to members, while investing in critically needed new housing supply.” 

“As the proportion of members approaching retirement increases, funds will look for asset classes that deliver stable cash-based returns. The affordable housing sector – backed by recurrent annual funding supported from the HAFF – is well-placed to meet that need.” 

 


Contact details:

Jack Allen: 0423 312 153, jallen@industrysuper.com

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