Federal Budget 2022-23: impacts for social and affordable housing
The Federal Government has announced it will increase the Government guaranteed liability cap of the National Housing Finance and Investment Corporation (NHFIC) by an additional $2 billion to $5.5 billion to enable NHFIC to support increased levels of loans to community housing providers.
In addition, the Federal Government will increase the number of guarantees under the Home Guarantee Scheme to:
- 50,000 per year for three years from 2022-2023; and
- then 35,000 per year ongoing,
to support first home buyers to purchase a home with a lower deposit.
The extension to the NHFIC liability cap was critically needed as new loan activity from the NHFIC has been constrained by the previous liability cap. This change will provide certainty to community housing providers about the continuity of the NHFIC financing model.
PowerHousing Australia says the increase to NHFIC’s Affordable Housing Bond Aggregator is expected to support an additional 27,500 dwellings.
The announcement supports community housing providers by giving them additional access to low cost finance. However, there remains a critical shortage of social housing stock that will not be resolved by these announcements only. Additional Government stimulus through a services fee or subsidisation is required to create new stock in the social and affordable housing sector, given the current social housing crisis and wait lists of 10 years or more. While this support does come through State Government based programs, more support is required from the Federal Government given the recent loss of stock in the NSW floods and the critical shortages.
The Federal Government’s announcements in this sector focus more on supporting first home buyers than creating new social housing stock. The Home Guarantee Scheme is aimed at enabling a first home buyer to purchase their first home sooner with as little as a 5% deposit.
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