Opening Statement by NHFIC

Thanks very much for the opportunity to participate in the hearings.

As part of the opening statement, I want to give the committee a very brief overview of:

• NHFIC’s purpose and our role in supporting housing outcomes across the housing continuum,
• a brief rundown of NHFIC’s research reports released over the last 12 months which includes the developer contributions paper we submitted to the inquiry,
• and our second State of the Nation’s Housing report which will be released in December.

First, who we are and what we do.

In terms of NHFIC, we were established by the Government in 2018. Our mission is to improve housing outcomes for Australians.

To that end, we administer a range of programs that help improve housing outcomes across the housing continuum.

They include:

• the Bond Aggregator, which harnesses institutional finance to support social and affordable housing projects, to support the growth of the community housing sector;
• the National Housing Infrastructure Facility, which funds critical infrastructure to unlock new housing supply;
• a range of schemes to support first home buyers, including the First Home Loan Deposit Scheme, the New Home Guarantee and the Family Home Guarantee;
• and our research function which undertakes research into housing demand, supply, and affordability across the housing continuum.

Given the focus of this Inquiry, I thought I would just briefly expand on NHFIC’s research. Our research agenda is informed by extensive consultation with stakeholders across the property, finance, academic and government sectors to ensure it remains relevant and also accessible to a wide audience.

Since commencing first of January 2020, NHFIC has produced nine research papers including our first flagship State of the Nation's Housing report last December.

Over 2021, we’ve released four short research papers, including:

• a paper looking at First Home Loan Deposit Scheme Trends and Insights,
• a paper looking at developer contributions which has been submitted to this inquiry,
• a third paper looking at stamp duty reform,
• a fourth paper looking at different financial structuring options to support subsidised housing.

Just very quickly on this year’s upcoming State of the Nation’s Housing report.

Our second flagship is due by mid-December this year. The report provides long-term projections of new supply, and new household formation - which is one indicator of housing demand - which provides a long-term snapshot of the balance of new housing supply and new households.

After extensive consultations and roundtables with industry, peak bodies, developers and other stakeholders, we’re building on and enhancing our report for this year, including:

• moving to include 10-year projections, which better aligns our projections with the housing development cycle;
• expanding on the distinction between new household formation - which has been weak due to low population growth driven by a pause of net overseas migration - and what we’re seeing in terms of strong price house price growth - which has been supported by factors such as low interest rates and fiscal stimulus measures;
• thirdly, enhancing our affordability analysis. Our Lorenz curve work - which shows the distribution of income versus property prices - will show the distribution of affordability across major cities and regional areas;
• and lastly, will include a regional focus to reflect the changing internal migration patterns following COVID.

Like our first report, we’ll be relying on the Centre for Population numbers to help inform our views about future household formation.

I hope this gives the committee a snapshot of our work, and we’re happy to answer any questions.