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As a nation, we are facing unprecedented societal and economic challenges, amplified by the COVID-19 pandemic.
The potential likelihood of historically significant levels of unemployment and low wage growth across all sectors, coupled with an overwhelming deficit, has spurred uncertainty across the property market.
The scenes witnessed during the Victorian government’s public housing lockdown to curb the virus last July was a defining moment. It magnified the urgent need for well-designed and well-maintained public housing, and support for viable solutions to meet the diverse housing needs of all Australians.
All levels of government must continue to work together to deliver an investment ecosystem that is forward-thinking to resolve the “missing middle” — the need for diverse, affordable housing choices for Australians. We are now seeing this approach mobilise the nation’s largest investors to provide capital into projects, delivering long-term investment returns and positive social and environmental outcomes.
Today, Australia is blessed to have a robust superannuation industry — the fourth largest globally — that is well positioned to provide material capital support via investment in social infrastructure projects like housing. This investment strategy can deliver stable, long-term, and highly predictable revenues while reducing our reliance on governments to initiate and stimulate this demand.
Internationally, we have seen institutional capital look for markets that are less prone to disruption and volatility.
The pandemic has seen us address our priorities as many households struggle to maintain secure housing tenure, and collectively we are considering how this may gravely affect future generations, particularly as they enter retirement. As this need for shelter exists in perpetuity, so then too is the required investment cash flow, which needs to remain highly predictable and directly linked to indices such as wage-price growth.
In the United States, we see build to rent – known as multifamily – as a long-established and steadily expanding component of its housing system and we should take these learnings to for our nation’s housing system to offer fair access to secure tenure housing for more Australians.
Australia requires housing to be delivered at scale to solve the many years of under-investment and systemic undersupply. Research by UNSW City Futures Research Centre indicates that we will have at least a one million dwelling housing shortfall by 2036. This significant gap of the ‘missing middle’ can be filled through mutually beneficial partnerships between the property development industry and community housing providers.
The Victorian government’s recent introduction of land tax concessions for build to rent developments is a positive move, however, we call on the government ensure a minimum provision of affordable housing is delivered by schemes that wish to access such concessions.
Kris Daff is managing director of build to rent development business Assemble Communities.
This opinion piece featured in the Herald Sun Friday January 8, 2021, you can view the article here.