Treasurer Wayne Swan and Minister for Housing Tanya Plibersek today launched the prospectus for the National Rental Affordability Scheme.
Under the scheme, the Australian Government has combined with State and Territory Governments to offer incentives to institutional investors and housing providers to build 50,000 new rental properties, which will be rented out at 20 per cent below market rate.
There is shortage of affordable housing in Australia and many families are struggling to find and keep a roof over their heads.
Continued low vacancy rates and strong demand for housing have driven rents higher across all the capital cities. Rents increased by 2.2 per cent in the quarter, the largest quarterly rise since 1989, to be 7.7 per cent higher through the year.
That's why the Australian Government announced $2.2 billion worth of new measures for housing affordability in the recent Budget.
Paying the rent is a major cost of living pressure for low and moderate income earners and strategies to free up the rental market - and put downward pressure on rents - are a key part of our national battle against inflation.
In order to stimulate investment, the Scheme will offer investors:
- a Commonwealth incentive of $6,000 per dwelling per year refundable tax offset or payment; and
- a State or Territory incentive of $2,000 per dwelling per year in direct or in kind financial support.
"Rental vacancy rates are below two per cent in most capital cities. The National Rental Affordability Scheme will increase the supply of affordable housing and reduce rental costs for many low and moderate income households," Ms Plibersek said.
"With NRAS properties to be rented out at 20 per cent below market rate, low to moderate income workers such as those in childcare, retail and hospitality can afford to live in areas where their skills are needed."
This form of asset class is new for Australia but has long been established in the United States. Many Australian banks and super funds currently invest in this asset class overseas.
Following industry feedback on the NRAS Technical Discussion the Scheme has been adjusted to broaden the eligibility requirements for tenants. This now means that up to 1.5 million households will be eligible to be tenants under the Scheme.
Information sessions on the National Rental Affordability Scheme will be held across the country from August 1 - 15. Details of the sessions are available at www.fahcsia.gov.au