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Speaking yesterday (12 September) at the AFR’s Property Summit, Minister for Housing Julie Collins called for greater institutional investment within the property market to address the housing shortfall.
Ms Collins stated that the predominant source of capital to build Australia’s homes had come from individual property investors and private developers, as “institutional investors have been largely absent”.
She emphasised federal Treasurer Jim Chalmers’ view on the role Australia’s $3.5 trillion in superannuation could play in helping fund the supply of much-needed properties.
Ms Collins commented: “Our population of 26 million is one-third of 1 per cent of the world’s total. Yet Australians hold $3.5 trillion in superannuation savings, the fourth-largest superannuation pool in the OECD (Organisation for Economic Co-operation and Development).
“Institutional investment that does occur in housing is primarily in niche sectors such as residential aged care facilities, student accommodation and subsidised affordable housing.
“In contrast, institutional investors have sizable investments in Australian commercial, retail and industrial property.”
Having recognised this problem, Ms Collins said the government had charged the interim National Housing Supply and Affordability Council (NHSAC) to provide a report on the barriers to institutional investment in housing in Australia.
She said the Barriers to Institutional Investment, Finance and Innovation in Housing report made 11 recommendations that were intended to improve the provision of housing services and increase the supply of housing.
Ms Collins stated: “The government will consider all the report’s recommendations carefully and consult with key partners, including the states and territories.
“I am pleased to say that through the National Housing Accord and decisions taken by national cabinet last month the government is already well on its way to implementing one of the council’s recommendations: the agreement with states and territories to establish housing targets, and for the government to provide incentives to encourage and support the meeting of these targets.”
She also announced that, in its report, the NHSAC found there was a “realistic prospect of establishing a significant new investment asset class” to help enable an institutional market for housing that “can add to the supply of rental stock and improve rental affordability”.
Ms Collins added: “The [NHAC] recommendations will build on the many federal and state-level incentives that are already in place and mutually reinforcing through the National Housing Accord.
“For instance, we are working with the states and territories through the National Housing Accord and national cabinet to support the planning and zoning reforms that are required to achieve the national target of building 1.2 million new well-located homes over five years from 2024.”
She also reiterated the importance of the Housing Australia Future Fund (HAFF), which on Monday (11 September) received the green light from the Greens after the government committed an additional $1 billion to the National Housing Infrastructure Facility, stating “it is fundamental”.
“HAFF will provide a secure, ongoing stream that will support the delivery of tens of thousands of new social and affordable homes, including giving institutional investors the long-term certainty they need to invest in this critical sector,” Ms Collins added.
[Related: HAFF set to pass Senate with renewed support]
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