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After the Australian Housing and Urban Research Institute (AHURI) found that less than 10 per cent of the necessary social housing stock was built per annum, the national body has called on government assistance to improve.
In a report titled Private sector involvement in social and affordable housing, AHURI concluded that Australia requires 36,000 social and affordable houses to be produced yearly, as opposed to the current quota of 3,000.
Richard Benedict of the University of Sydney responded to the findings, outlining how demand can be met.
Mr Benedict explained that “it is clear forms of ‘hybridity’ of the housing system are essential, whereby social, and affordable housing is increasingly financed, developed, and managed by a combination of government, community-based, and market providers, and cross-sector partnerships”.
“No one sector can address the need alone,” he assured.
While several institutional investors and superannuation funds had a level of interest in investing in social and affordable housing despite the typically lower yields they present, AHURI found such activity to generally be centred in Sydney and Melbourne, where demand is consistently high.
As such, private investment in affordable housing for those on the lower end of the income scale will require some capacity government subsidy or capital contribution, a point which Real Estate Institute of Australia (REIA) president Hayden Groves built on when he called for measures such as negative gearing to be provided in order to level the housing sector’s playing field.
He believes such measures are necessary, especially when considering the housing market is constructed by “predominantly mum and dad investors supplementing their superannuation savings”, who do not require “draconian measures such as rent freezes or additional land taxes.”
He said the federal government’s recent announcement to “host roundtables with lenders and developers in a bid to address housing affordability is unlikely of itself to be a circuit breaker”.
“While the Treasurer is busily consulting superannuation funds and banks on how to finance additional investment, it is unlikely this will result in a single new house being built.
“You need to have local and state governments approving developments, setting standards, and working with the building sector and estate agents who bring current market intelligence involved in the process,” he said.
Mr Groves concluded that the REIA “support a national plan that will address housing affordability that benefits all key stakeholders and helps Australians into homes”.
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