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A new report by the University of NSW Cities Futures Research Centre puts forward the fact that more should be done to encourage superannuation funds and other large-scale investors to invest directly in affordable housing rental schemes. A validation for NRAS, the recently terminated housing solution. Ironically the recommendations for institutional funds such as super funds to hold domestic proeprty, was exactly the original focus for NRAS as an asset class. It was largely lack of interest and support for the concept from the super funds, that allowed access to the substantial benefits of NRAS for private individual investors.
According to the report published in the Sydney Morning Herald
..... The lack of affordable housing in cities like Sydney is widely considered to be pushing those on lower incomes further into the outer suburbs and away from the job-rich centres of the inner city.
"We need to recognise that large-scale rental housing is going to be a bigger feature of Australian housing going forward," Professor Pawson said.
"An affordable element within that is something that governments need to actively facilitate because it won't come about just through market forces."
The report notes investment in the sector suffered a setback last year when the federal government scrapped the National Rental Affordability Scheme, which offered incentives to those prepared to build and rent dwellings 20 per cent below the market rent.
Professor Pawson said such a scheme should be structured to be attractive to institutions like super funds rather than "small-scale speculative investors," who already had access to negative gearing and land tax concessions.
This could include incentives like subsidies, or planning interventions like mandatory affordable housing targets.
"The combination of those things would be enough to enable the end product to be rented out at an affordable level, not the market rent," he said.
Pauline Vamos, the chief executive of the Association of Superannuation Funds of Australia, said it was an area that many funds were looking into.
"It's a nice asset class, it's domestic property, has a social good, which is very important for many funds, and you've got that potential for a steady return as well as a capital gain," she said, adding "We buy and hold, we don't buy and flip".