Small-scale property investors could play a big role in addressing Australia’s affordable housing crisis, according to new research.
According to research from the University of South Australia and RMIT University, 90 per cent of all property investors in Australia are small-scale ‘Mum and Dad’ investors, presenting a significant opportunity for affordable housing initiatives.
The study revealed that landlords who focus on long-term property investment are particularly open to participating in affordable housing schemes.
Lead researcher, Associate Professor Akshay Vij from the University of South Australia, said the research identified two main types of investors.
“Generally short-term landlords focus on capital gains and negative gearing to create their housing wealth,” Associate Professor Vij said.
“They prefer to buy newer, higher-value properties and, as a consequence, are not a significant source of affordable housing.”
The research found that headleasing programs, where social housing providers lease private rental accommodation at market rates, have proven particularly successful.
“Many landlords were not financially sophisticated and tended to invest from a place of ‘sentimentality and informality’ rather than an objective assessment of investment risk and return,” Associate Professor Vij said.
The study showed that 81 per cent of investors who had participated in affordable housing schemes found them satisfactory, with guaranteed rental payments and reduced administration demands being key benefits.
Between 40 and 60 per cent of surveyed landlords expressed a willingness to participate in schemes such as headleasing or the National Rental Affordability Scheme.
However, awareness remains a significant issue, with only 39 per cent of the 800 landlords surveyed currently engaged in affordable housing schemes.
“A coordinated national education program to increase awareness of affordable housing incentive schemes could improve participation,” Associate Professor Vij said.
