Affordable Housing

Super funds investing $1b in US affordable housing because 'no opportunities in Australia'

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Australians have invested $1 billion to create affordable housing — not here, but in the United States.

That is the assessment of Daryl Browning, the CEO of Industry Superannuation Property Trust (ISPT), one of Australia's largest property fund managers.

Individuals are not choosing to put their money into the American affordable housing market, but Australian superannuation funds and investment houses are doing it for them.

"It's not a deliberate ploy," Mr Browning said.

"I think there just haven't been the opportunities to do it in Australia."

Aussies investing in US

It seems unbelievable Australians are investing in affordable housing overseas but there's still hope at home, writes Guy Stayner.

The investment companies are not to blame.

Their primary objective is to get a return on investment for their members, and the reality is Australian investment funds can get a decent return backing social housing and build-to-rent projects in the US while they cannot make money from it in Australia.

"In Australia the scale hasn't been there and the returns haven't been there, so it hasn't attracted institutional scale investment as yet," Mr Browning said.

Treasurer Scott Morrison acknowledged it was a problem and one not just confined to investment in America.

"Australian super funds are investing in affordable housing in the UK," he said.

The Treasurer said he hoped his housing affordability package with investment incentives and a 60 per cent discount on capital gains tax for community housing projects would start to redress the imbalance.

"There is capital available to invest in these projects but in Australia we haven't seen that at the scale that we have in other countries," he said.

(Source: Australian Broadcasting Corporation )