16 Apr 2024
ANZ CoreLogic Housing Affordability Report 2024
April’s edition of the ANZ CoreLogic Housing Affordability Report is a guide to the main trends and drivers of housing affordability across Australia.
24 Jul 2024
Assembling a housing solution
How can a city function without its nurses, disability carers, or the scores of other workers that keep a society moving?
This is the question Australia has had to grapple with in recent years as the proportion of income required to service rents and mortgages has climbed – making it hard for many essential service workers to find suitable accommodation.
" (This is about) increasing the supply of new, high-quality homes to the many Australians for whom renting or buying a home has been increasingly challenging,” Carolyn Viney."
One innovative model, by housing developer and manager Assemble, is showing how the private sector can help alleviate this need, but at the same time draw in significant institutional investment.
The model has received a boost with industry super funds AustralianSuper and Hesta taking a controlling stake in the, until now, privately owned Assemble, and merging with its fund manager Super Housing Partnerships.
According to Assemble chief executive Carolyn Viney the deal means delivering 17,000 new residences over the next 10 years.
“(This is about) increasing the supply of new, high-quality homes to the many Australians for whom renting or buying a home has been increasingly challenging,” Ms Viney said.
The Assemble story
Assemble is not an overnight success.
The company was founded in 2010 as a publication known as Assemble Papers in which founders advocated for new ideas about the future of housing – including reducing environmental impact and supporting community connection.
Over the past decade, Assemble has developed rent and purchase models which made it easier for people on all income levels to buy quality houses in central locations.
This involves integrated build-to-rent model and home-ownership pathways via build-to-rent-to-own and build-to-sell living options in desirable areas with good amenity in and around capital cities.
Assemble also created more options for institutional investors to back the projects and make good returns. By providing a diverse range of investment opportunities across the spectrum of mid-market housing, Assemble solved a key challenge for institutional investors wanting to scale their housing investments.
Under this model the company aims to provide institutional investors with investment opportunities which generate stable, long-term returns by investing in housing at scale across Australia.
The company now has projects across Melbourne’s suburbs including Brunswick and two sites in Kensington.
Long term support
The move works alongside ANZ’s goals to support the building of social and affordable housing.
ANZ has a current housing target to fund and facilitate $10 billion in investment by 2030 for more affordable, secure and sustainable homes to buy and rent.
The bank has already delivered around $5.3 billion into the housing sector, with around $610 million delivered last year.
Expanding the model
The new Assemble structure is expected to enable new institutional investor partners to participate in scale housing investment opportunities across the housing spectrum.
Assemble has adopted a co-leadership approach with Kris Daff continuing as Assemble Managing Director, and Carolyn Viney as Assemble CEO.
Mr Daff says the move means Assemble can expand its already successful model.
"Backed by two of the nation’s largest industry superannuation funds, we are able to scale up the various innovative housing models we have developed over a number of years, and in doing so, provide stable, long-term returns for our investors and their members while offering much-needed housing options for Australians," he said.
Australian Super Chief Executive Paul Schroder says the move makes sense.
“We believe all Australians should live well in retirement, and to do that they need both super and housing,” Mr Schroder said.
HESTA CEO Debby Blakey said her fund provides for health and community services workers impacted by the housing crisis.
“Australia’s housing shortage impacts our members who provide critical services and need to afford housing near their work, as well as economic productivity that presents broader systemic risks to long-term investors like HESTA,” Ms Blakey said.
It is another step in Assemble building secure social and affordable rental apartments in suburbs where this type of housing is needed most – and serving as an example for others who want to help solve the problem.
Jeff Whalley is a journalist with bluenotes
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
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