20 October 2023
HESTA, an institutional investor with approximately $76 billion in assets under management, supports the focus of a long-term national vision to tackle housing and homelessness.
This issue has been a growing concern in the country due to rising property prices, a shortage of affordable housing, and an increase in homelessness rates.
HESTA manages the investments of more than one million members, most of whom are dedicated healthcare and community services professionals. Many of these essential workers, around 80 per cent of whom are women, are on modest incomes, and struggle to afford affordable housing options near their workplaces.
HESTA CEO Debby Blakey emphasised the Fund's strong commitment to help address the challenge of housing and homelessness policy by committing capital, with a particular focus on enhancing housing supply for individuals with low-to-middle incomes.
“HESTA acknowledges the impact of Australia's housing crisis and is actively engaged in developing and advocating for policy solutions to address this pressing issue,” Ms Blakey said.
“Housing is a complex area of regulation with inputs from Local, State and Federal levels of Government. There is a clear role for investors as public money cannot meet this challenge alone, but superfunds need clarity of the investment landscape.
“Our members, who work in healthcare and community services, are experiencing housing affordability challenges that could affect their financial security in retirement.
“HESTA supports the Federal Government's Housing Accord and Housing Australia Future Fund (HAFF), and related legislation to address this crucial issue.”
Ms Blakey said HESTA recognised the pivotal role of the build-to-rent sector in addressing the housing needs of low-to-middle-income earners.
While the build-to-rent sector in Australia is still in its infancy, HESTA is determined to help. HESTA's housing investment strategy includes mixed-tenure developments incorporating social, affordable, and disability accommodation alongside market-rate dwellings.
"HESTA is expecting to invest potentially $240 million with Super Housing Partnerships, paving the way for mixed-tenure build-to-rent apartment projects that provide stability and promote social and affordable housing," Ms Blakey said.
"This strategy maximises social outcomes and provides investors with a stable income profile, lower vacancy rates, and resilience during economic downturns."
To foster innovation in housing delivery, HESTA advocates for consistent definitions of affordability and qualifying parameters for social and affordable housing projects.
"Our proposed definition of affordability, based on real incomes for workers like our members, ensures that rents do not exceed 30 per cent of household income," Ms Blakey said.
Ms Blakey said HESTA also recognises the importance of policy stability and certainty to attract institutional investors. Long-term decision-making by policymakers and access to transparent data are critical factors in providing the stability necessary for housing investments.
In its submission to the Federal Government’s Housing and Homelessness Plan Issues Paper, HESTA suggests various policy levers to incentivise institutional investment in housing, including planning and zoning reforms, increased site yields, access to low-cost finance, and taxation approaches promoting social and affordable housing investment.
To view the submission, visit https://www.hesta.com.au/about-us/super-with-impact/advocating-for-change
HESTA is one of the largest superannuation funds dedicated to Australia’s health and community services sector. An industry fund that’s run only to benefit members, HESTA now has more than one million members (around 80% of whom are women) and currently manages approximately $76 billion* in assets invested around the world.
*Information is current as at the date of issue.