Bonds deliver $562m boost to build social housing for vulnerable Australians
Tasmania will benefit for the first time, with local community provider Housing Choices Tasmania receiving a $17m bond.
The federal government’s bond aggregator has announced a third round of funding worth $562m to assist social housing providers build affordable options for vulnerable Australians.
It is the largest funding allocation the National Housing Finance and Investment Corporation (NHFIC) has announced to date and will be directed to 10 community housing providers across NSW, Victoria, Tasmania and South Australia.
Low interest loans of 2.06 per cent fixed over 12-year terms will help support the construction to 775 new dwellings and support an additional 2736, saving housing providers more than $80m in interest payments.
NHFIC chief executive Nathan Dal Bon said the latest round of bonds will help support the most vulnerable in the community and highlights the emergence of Australia’s community housing sector emerging as a new investment asset class.
“It is pleasing to see the strong support from domestic and international investors for the community housing sector. These funds will be channelled directly to community housing providers to support Australia’s most in need at such a challenging time,” Mr Dal Bon said.
Tasmania will benefit for the first time from the low rate loans, with local community provider Housing Choices Tasmania receiving a $17m bond to fund 192 existing and new social and affordable homes. The state’s capital, Hobart, has notoriously had the tightest rental market over the past two years, largely due to holiday rentals and limited new properties being made available.
Housing Choices Tasmania’s managing director Michael Lennon said the long-term debt financing will allow the creation of much needed social housing in Tasmania.
“This agreement will enable us to continue our established commitment to not only housing Tasmanians who are locked out of the private rental market, but also providing a range of services that help to sustain those tenancies and build a foundation for the future,” Mr Lennon said.
SGCH Sustainability in NSW was allocated the largest loan ($210m), followed by BaptistCare NSW and ACT ($144m) and Mission Australia Housing ($65m).
ANZ director of sustainable finance Tessa Dann said the timing of the latest grants were critical given the economic upheaval many are facing in light of coronavirus.
“NHFIC’s use of social bonds to tap investor capital for the community housing sector is critical given the impact of the COVID-19 pandemic on the ability of people to remain in housing.”
Nearly $1.2bn in bonds have been allocated by NHFIC since it was established two years ago, which has helped 1700 new dwellings to be built and support 5400 existing homes.
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