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Government guarantees community housing finance

Date published: Friday 8 December 2017

Category(ies): News

Michael Sukkar, Assistant Minister to the Treasurer with responsibility for housing has announced the details of how the Government's promised housing bond aggregator will work.

The Government foreshadowed in January that it was considering establishing a housing bond aggregator to pull together investment funds for investment in social and other low-cost housing, as a housing affordability measure.

The proposal to establish the aggregator was announced in the May 2017 Budget.

Mr Sukkar announced details of the aggregator, the National Housing Finance and Investment Corporation (NHFIC), at the Australian Housing and Urban Research Institute conference in Sydney, which was attended by a number of people from Baptist Care Australia member organisations in NSW, the ACT, Victoria and Tasmania and Baptist Care Australia's national office.

Mr Sukkar said, "The NHFIC will operate an affordable housing bond aggregator that will drive efficiencies and cost savings in the provision of affordable housing by community housing providers. The NHFIC will also administer the National Housing Infrastructure Facility (NHIF) - a $1 billion facility that will finance housing-related infrastructure to reduce bottlenecks that impede the supply of new housing.

He said the affordable housing bond aggregator will be open to applications from all registered community housing providers to apply for finance. To provide stability and confidence, the Commonwealth will guarantee the bonds issued by NHFIC.

"Eligibility for NHIF finance has been expanded beyond local governments, to entities including State, Territory, and local-government owned corporations and utility providers, and registered CHPs."

Legislation to establish the NHFIC will be introduced into Parliament in early 2018.

Writing in The Conversation several housing experts said, "The announcement went largely unreported, but it was significant. The guarantee is a crucial piece of the affordable housing policy architecture, complementing the "bond aggregator" (or intermediary) mechanism announced in the budget."

The article said, "These combined measures should create an efficient private investment pathway into social and affordable housing for super funds, insurance companies and other entities hungry for low-risk returns.

"This development could also catalyse efforts to build a national housing accord backed by industry, civil society and welfare groups to expand affordable housing for the growing number of Australians in need. A campaign in support of this, Everybody's Home, was foreshadowed at last week's conference."