Addressing the Australian housing crisis: A collaborative path forward
Addressing the Australian housing crisis: A collaborative path forward
The property sector is shifting at a significant pace in the face of the housing crisis, marked by a severe shortage of social and affordable homes and escalating rental prices. Recent initiatives under the Federal Government’s Housing Australia Future Fund (HAFF) and National Housing Accord Facility (NHAF) are pivotal steps towards mitigating this crisis.
Last week, Housing Australia announced the approval of 12 project contracts to deliver the initial pipeline of housing projects selected under HAFF Funding Round One. These contracts will deliver over 800 social and affordable homes, with more than 240 social and 570 affordable homes, either completed or currently under construction. This marks a significant milestone in achieving the national target of 40,000 social and affordable homes over the next five years.
Preferred applicants from Round One still have until 30 June 2025 to enter into funding agreements, ensuring a steady pipeline of projects. Additionally, applications for Funding Round Two closed on 31 January 2025, with plans to activate up to a further 5,000 social dwellings as soon as possible.
The importance of partnerships and collaboration
Partnerships and collaboration remain key to the successful delivery of the national housing target. By leveraging the strengths and expertise of various stakeholders, including those in the Community Housing sector, government, investors, debt funders, and various advisers, we can address the collective challenge of the housing crisis more effectively. These partnerships are essential for bringing together capital and capability to improve housing outcomes for our communities.
Strategic planning and financial considerations
Forward-thinking in structuring these arrangements is crucial. It’s important to consider the accounting and tax implications that will impact financial statements over the next 20-plus years. We understand that the underlying arrangements for these projects can be complex, which may result in special purpose vehicles, joint arrangements, or other investments creating interesting accounting implications for organisations' financial reporting.
Navigating these accounting intricacies should be considered upfront to ensure appropriate stakeholder management. Additionally, there are many income and indirect tax implications which can impact organisations in the short and longer term, which need to be understood and managed into forecasts and budgets. This strategic planning will ensure the sustainability and financial viability of housing projects into the future.
Looking ahead: The impact of the Federal Election
With the Federal Election anticipated in mid-2025, there may be potential sovereign risks which could impact the aim to deliver these homes. It’s essential to consider how changes in government policies could affect the housing sector and think about solutions that are not necessarily reliant on government funding structures. Looking to international examples and commercial funding structures could provide valuable insights and assist in the continued delivery of Australia’s housing goals.
How BDO can help
The Australian housing crisis is a complex issue that requires coordinated efforts from all levels of government, industry stakeholders, and the community. By addressing both supply and demand factors, and through strategic partnerships and planning, we can work towards a more equitable and sustainable housing market for all Australians.
Our national team of real estate and construction experts are proud to work with clients of all sizes across the sector, including developers and community housing providers who are such an important force in changing the housing market for good in Australia.
There is still time for preferred applicants from Round One of the HAFF funding to enter into funding agreement with Housing Australia, with the deadline set for 30 June 2025.
If you’d like support with your housing projects or HAFF arrangements, or would like to explore how our advisers can help your real estate or construction business continue to grow and develop, contact us today.