Affordable housing plan needs more funding, says expert

A key federal government measure to boost the supply of affordable housing has little chance of success without additional support funding, experts say.

The affordable housing bond aggregator will provide long-term loans to community housing providers, funded by investment from institutional players like superannuation funds.

However, with affordable housing rents set at below market rates, the government will need to bridge the gap to make the returns appealing to investors, according to British expert Piers Williamson.

“Subsidised housing needs subsidy,” said the chief executive of The Housing Finance Corporation (THFC). “[Government grants] are one of the things that are missing over here, it’s pretty key.”

As head of the THFC, an affordable housing bond aggregator operating in the UK for 30 years, Mr Williamson has been advising the Turnbull government on its National Housing Finance and Investment Corporation (NHFIC).

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