Over the past 18 months, Treasurer Scott Morrison and Treasury officials have been working on the bond aggregator – the National Housing Finance and Investment Corporation (NHFIC) – to raise money at lower rates from the wholesale bond market for not-for-profit community housing providers.
Last Friday, Assistant Treasurer Michael Sukkar made an appearance at the National Housing Conference in Sydney to announce a government guarantee on investment in affordable housing. The guarantee is a crucial piece of the affordable housing architecture and complements the affordable housing “bond aggregator” mechanism announced in the 2017 budget.
Also read: Western Sydney hit hard by mortgage stress
These combined measures should forge an efficient private investment pathway into social and affordable housing for superannuation funds, insurance companies, and other entities eager for low-risk returns.
The federal government’s Affordable Housing Working Group outlined this approach, drawing on a number of reports commissioned through the Australian Housing and Urban Research Institute (AHURI). These reports assembled compelling evidence from a range of countries of the proven record of government-backed financial intermediaries and debt guarantees in affordable housing systems.
Judging from the responses to the Treasury consultation paper, the guarantee enjoys robust industry and political support. This development could also catalyse efforts to build a national housing accord backed by industry, welfare groups, and civil society groups to expand affordable housing to the growing number of Aussies in need.
A campaign in support of this endeavour, Everybody’s Home, was introduced at last week’s conference.