Alternatives Outlook 2024 Report

dwellings and 10,000 Affordable Housing dwellings over five years. This is complemented by the National Housing Accord (NHA), which is an agreement between the State and Federal Governments to increase the supply of housing, including by providing subsidies to collectively deliver a further 20,000 well located affordable dwellings. Both the HAFF and the NHA aim to provide consistent subsidies for 25 years to providers of subsidised housing. Funding approvals for Round 1 of the HAFF and the National Housing Accord are expected to be awarded in Q3 2024. As a result of diverse funding and operational models across the sector, there remains significant variability in achievable return rates. However, most investors are currently working

The feasibility of affordable housing investments are largely contingent on investor access to government initiatives including subsidy payments, concessional financing tools, various forms of tax relief, and planning incentives. Subsidies can come in various forms such as upfront capital grants, rental top ups, fixed availability payments, or discounted land leases. There are currently several policies across both state and federal levels that influence the viability of the affordable housing sector. At a national level, Housing Australia's Affordable Housing Bond Aggregator is one tool that offers concessional finance to enhance the feasibility of social and affordable housing development. With current approved loans totaling AUD 3.4 billion, the AHBA has been an essential aspect of fostering the recent growth of the affordable housing sector. Additionally, in late 2023, the Albanese Government passed legislation on the AUD 10 billion Housing Australia Future Fund (HAFF) which aims to fund 20,000 new Social Housing

AFFORDABLE HOUSING Australia’s current housing supply shortage has seen the issue of affordability rise on the political agenda. Simultaneously, many global institutional real estate investors are placing affordable housing at the forefront of their strategies. The broader Australian affordable housing sector includes several sub-types including key worker accommodation, social housing and other forms of accommodation specific to various social and health groups.

on models that provide core returns. Sector size estimate: AUD 15 billion Yield range: 4.00-7.00%

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