26% uplift in lending to social and affordable housing sector
12 November 2014
The current lack of affordable housing in Australia and New Zealand is a significant social issue. Many families on moderate, low or very low incomes are struggling to find affordable rental accommodation without falling into severe rental stress.
In NSW alone, the current waiting list for social housing has more than 58,000 applicants.
Recognising the depth of this issue, in 2013 Westpac announced a pledge to make up to $2 billion in funding available by 2017 to increase the volume of social and affordable housing stock across Australia and New Zealand, and look for better ways to partner with not for profit community housing partners and governments to help grow the industry in a sustainable and commercial way.
During 2014, Westpac’s total exposures to this sector increased by 26% to $820 million, up from $650 million in 2013.
In addition, in October 2014, Westpac signed its largest single community housing finance deal, providing $61 million debt finance to SGCH to facilitate the construction of 275 new dwellings across the Sydney metropolitan region.
SGCH is one of the largest community housing providers in Australia, housing more than 8,000 people in 4,300 homes, and providing social and economic opportunities through the provision of secure, affordable and sensitively managed housing.
SGCH CEO, Nazha Saad said, “This finance facility will go a long way to providing safe, secure housing for families across New South Wales where the shortage is unacceptably high.”
Westpac Institutional Bank’s Head of Government and Education Jon Ross said this form of housing in Australia has traditionally been built through capital programs fully funded by Government.
“The landscape is now being reshaped by the growing role of community housing providers. We are beginning to see signs that the sector is evolving along similar lines to the mature UK market, which has total borrowings in excess of GBP40 billion.
“The composition of Boards and management teams in the sector are changing, with a growing focus on financial expertise and strict risk management protocols and corporate governance.
“Westpac is working with the CHPs and the State Governments to explore the optimum way for this sector to source the capital needed for the growth,” Mr Ross said.