Cbus Super has committed to investing up to $500 million over five years to support the construction of new social and affordable homes.
The investment will be made through the Housing Australia Future Fund (HAFF) as part of the government’s National Housing Accord announced in this year’s budget.
Cbus CEO Justin Arter said that the super fund is determined to help supercharge the financing of new social and affordable housing across the country.
“Cbus Super’s commitment is subject to the finalisation of commercial terms for the HAFF, but we are confident of reaching terms that will be in the best financial interest of Cbus Super members while unleashing billions in new funding for community housing projects,” he said.
Cbus chair Wayne Swan added that the fund’s commitment to the National Housing Accord aligned closely with its deep connection to the construction industry.
“We believe that investing through the HAFF will meet the best financial interests of our members, particularly those members requiring a steady stream of income during retirement or as part of a more conservative accumulation product,” said Mr Swan.
Furthermore, deputy CIO Brett Chatfield said that the earlier work of the National Housing Finance and Investment Corporation (NHFIC), which Cbus has collaborated with since 2018, has shown that it is possible to align financial returns for members with an affordable financing stream for community housing providers.
“This new fund, if we can get the settings right, will be an even greater leap forward for the provision of social and affordable housing,” he said.
The area has seen a flurry of activity in the past week, with AXA IM Alts, St George Community Housing and the NHFIC forming a partnership to deliver affordable homes.
HESTA also announced that it would invest $240 million in the launch of Super Housing Partnerships to seed the fund’s initial focus on a pipeline of build-to-rent apartment projects.
Meanwhile, NAB CEO Ross McEwan has described affordable housing as a significant and growing issue that could be better supported by banks and other finance providers.
The bank earlier confirmed it planned to lend at least an additional $6 billion through to 2029 to help more Australians access affordable and specialist housing, with a focus on specialist disability accommodation, development of social and affordable housing projects, and finance for low-income earners and essential workers.
Mr McEwan suggested that the new National Housing Supply and Affordability Council (NHSAC) creates the opportunity to further drive better outcomes for all Australians.
He also called for more nationally consistent planning rules to allow more homes to be built in inner and middle-ring suburbs of the nation’s largest cities.
“Incentives for organisations to release, sell or at least partly develop large parcels of unused or underutilised land would also create more affordable housing supply,” said Mr McEwan.
“Greater collaboration between the finance sector, state, territory and federal governments could also increase construction of affordable and social housing, with tailored options required on debt and equity to facilitate more lending to community housing providers.”
Government must play a ‘leadership role’
As part of his first investor roundtable on Friday focusing on affordable housing, Treasurer Jim Chalmers said that the government was excited to bring together investors with trillions of dollars in funds under management to join forces in tackling major economic challenges.
“The Albanese Labor government wants to work with investors to see where we can deliver win‑wins for investors and superfund members and for the national economy and the Australian people more broadly,” he said.
Dr Chalmers said that low vacancy rates, high rents and difficulties finding housing where jobs and opportunities are being created are key issues that the government is looking to address.
The Treasurer also acknowledged that the federal government needed to play a leadership role when it came to affordable housing.
“We’ve got a big chance in this country to work together to deal with housing affordability to deal with some of our other economic challenges,” he said.
“I am confident we will be successful. And I know that there's a lot of interest and a lot of excitement amongst investors of all kinds in playing a role here.”
Other topics up for discussion at future investor roundtables, which are due to be held every three to four months, will include data and digitisation as well as clean energy.
“We want to establish a routine and a model for working with the investors and the trillions of dollars of capital to make sure that they are meeting their responsibilities to their investors and members at the same time as the Albanese Government is meeting its responsibilities to the national economy and to the Australian people more broadly,” said Dr Chalmers.
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Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.