Having a roof over your head cannot simply be reduced to an economic equation.
Delivery of new housing cannot be measured only by totalling the gap between supply and demand. Housing provides a base for one to exist in a community and access both the social and economic opportunities allowing them to thrive.
"Here is where figures and metrics are important – ANZ has a target to fund and facilitate $10 billion of investment by 2030 to deliver more affordable, accessible, and sustainable homes to buy and rent.”
As a nation, a growing number of Australians can’t access suitable housing. We are simply not building enough housing to match demand and the challenges for delivering more social and affordable housing are becoming more complex.
There are around 363,000 social housing dwellings in Australia, less than half of what is needed to match waiting lists across the country, according to research from the Australian Housing and Urban Research Institute.
Over the last two decades, social housing has not kept pace with need, house prices have soared, rental vacancies have dwindled to 1 per cent and Australia’s population grew by a third.
Those who were once caught in the safety net or were able to find a place are realising it is harder to locate affordable rental accommodation, particularly for the young, the vulnerable and the elderly.
The Federal Government recently passed legislation to establish the Housing Australian Future Fund, which has committed to support construction of 20,000 social homes and 10,000 affordable homes over the next five years.
The fund will invest $10 billion via the Future Fund and returns on those investments will support subsidies to successful tenderers to help build and maintain this housing.
Given the size of the market gap, a mix of government initiatives and private sector innovation has evolved to support the delivery of the right supply to market. At ANZ, we view housing as central to our purpose of helping to shape a world where people and communities thrive.
We're committed to helping improve the availability of suitable and affordable housing options for all Australians and New Zealanders.
As a part of this we're supporting an increase in the supply of social and affordable housing by investing in emerging housing markets, such as specialist disability accommodation, land lease housing and build to rent. And by backing new house models, including 'build-to-rent-to-own'.
We're also working with our community partners by backing programs that aid people experiencing vulnerability and to help alleviate homelessness.
Here is where figures and metrics are important – ANZ has a target to fund and facilitate $10 billion of investment by 2030 to deliver more affordable, accessible, and sustainable homes to buy and rent.
This commitment was made in 2018 and we are already halfway there – with over $5.3 billion worth of deals already financed. How we’ve pursued this goal – and formed key partnerships – shows the way ahead.
In September, ANZ supported the launch of a new project by specialist affordable housing fund manager Super Housing Partnership (SHP) and their venture partner, Assemble.
SHP provides institutional investors with access to equity investments in new ‘build-to-rent’ housing projects with a focus on social and affordable housing.
ANZ partnered with SHP, Assemble, HESTA, Treasury Corporation of Victoria and Housing Choices Australia to deliver the project – which required no underlying government subsidy.
But what does this deal mean for those in need of an affordable rental?
In September, construction commenced on SHP’s first project located in Kensington just four kilometres from the Melbourne CBD – close to both public transport and employment opportunities.
For those most in need it means there will be 362 apartments across five buildings including 73 social, 73 affordable, 14 specialist disability accommodation and 202 private market rental homes.
ANZ also continued our support for an emerging market model through Assemble’s second ‘build to rent to own’ project – which will be home to a new community in 2024.
This project, also in Kensington, will comprise 199 apartments, with 1,322 square metres of office and 145 square metres of retail over seven levels in across two co-joined buildings.
The Assemble Futures model is a “rent-with-the-option-to-buy” model developed to provide a fairer approach to home ownership. The rental and purchase price are fixed and agreed upfront, so buyers have fixed rental costs as they save for a home deposit.
Buyers also have the option, but not the obligation, to purchase the home at the end of the five-year lease. We believe the offer of security of tenure and assisting buyers to save for a deposit make this a model worth backing.
This month ANZ provided financing to the Ground Lease Model 2 project, a public private partnership between the Victorian Government and the Building Communities consortium.
ANZ, alongside Housing Australia and Sumitomo Mitsui Banking Corp (SMBC), provided a green and social loan for the project. ANZ also acted as the sustainability coordinator for the loan.
Under this project model, Homes Victoria will lease public land to the consortium to finance, design and build 1,370 new social, affordable, specialist disability and market rental dwellings across four sites in Victoria.
The new dwellings will replace aging properties with modern, accessible and energy-efficient homes in South Yarra, Prahran, Hampton East and Port Melbourne.
The project will help address the undersupply of social and affordable housing in Victoria representing an overall 31 per cent increase in social housing across the sites and doubling the state’s requirement for specialist disability dwellings.
The consortium is led by Tetris Capital, with the design and construction to be undertaken by Icon and supported by equity partners Abrdn and Invesis. It is expected to be complete by the end of 2026.
Delivery of tenancy, community and related property management services will be managed by community housing providers, led by Community Housing Limited (Vic) working alongside Aboriginal Community Housing (Vic) Limited and Women’s Property Initiatives.
We recognise affordable housing is a societal issue best addressed by collaborative partnering between the public and private sectors in new and innovative ways.
This involves financial institutions helping to change the market by delivering more of the right housing, in the right locations and the right price point for both rental and purchase.
While these projects represent a beginning on the way to solving a bigger problem, we hope they provide a model which can be expanded in the future.
Kevin Corbally is Chief Risk Officer of ANZ
For more on ANZ’s housing target, partnerships and projects here.
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
19 Oct 2023
18 Jul 2023