10 March 2014 — A new partnership between Investec, the South Australian Government and not-for-profit housing provider Community Housing Limited will use an innovative rent-then-buy model to deliver affordable housing for workers including teachers, nurses, police officers and hospitality staff.
The project in the inner-Adelaide suburb of Bowden will comprise 80 apartments, with at least 40 per cent of the dwellings earmarked for an affordable ownership program and the balance for sale off-the-plan to owner-occupiers and investors.
Investec’s head of power and infrastructure finance Peter Mansfield told The Fifth Estate that the finance model is geared towards social sustainability by enabling key professionals to afford to buy in a suburb close to their place of employment.
“Typically these [high density] projects are done by developers wanting a large margin; under this model we can deliver a more affordable product,” Mr Mansfield said.
“We’re not in the business of speculative development.”
Mr Mansfield said the lack of affordable housing, even for those in traditional middle class occupations, is an issue in cities around the world. For this reason, there have been expressions of interest in the new finance model from other Australian state governments and from the New Zealand government.
“[The model] is a mechanism to make sure people who work in a community can live in that community,” he said.
Community housing is a new focus for Investec, with the company generally more engaged with infrastructure projects.
“This is an extension of our broader social infrastructure model that looks to deliver a more efficient outcome for governments and semi-government institutions through a collaborative approach between the public and private sectors in delivering core government infrastructure,” Mr Mansfield said.
He said the partnership with government was an effective way of reducing the risk inherent in property developments.
For the Bowden project Investec will purchase the site from the government and undertake the development, the government will provide the criteria for the key workers based on income levels, and Community Housing Limited will provide the ongoing management expertise.
The occupants of the rent-then-buy properties will pay a rent 75 per cent below the market rate, giving them an opportunity to save for a deposit, with tenants becoming eligible for the option to buy after three years.
Homes are likely to be available for sale and lease arrangement off the plan from mid-2015, with completion and occupancy planned for mid-2016.