Is social housing really a serious investment?

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The Albanese government wants superannuation funds to bankroll affordable housing for the community, but the jury’s still out on whether the investment thesis stacks up.

In urging executives in the $3.3 trillion superannuation sector to support social and community housing projects, former prime minister Paul Keating invoked the powerful imagery of homeless kids.The Australian Financial Review

Big super funds signed up to the accord, saying they are keen to diversify their real estate portfolios into social and community housing“We want to be part of a broader solution while delivering on our overall purpose to help members achieve their best financial position in retirement,” says AustralianSuper chief executive Paul Schroder. “Innovative thinking, collaboration and true structural change is what is needed for Australia to tackle the housing affordability issue.

But whether it stacks up on pure investment grounds is less obvious. “I would see social housing as a potential asset class for investment,” O’Hara says. “However, this assessment comes with a long list of caveats.” More broadly, he describes residential real estate as a “lumpy” and “low-liquidity” capital asset – difficult to sell and expensive to maintain. In the current environment, real estate investment faces many inflationary pressures, including the rising costs of building and maintenance supplies.Michael O’Hara, Wealth and Security Planners

 

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Let's see. If ADF housing is any indication, it may be. Let's do a trial run and see what happen to gather empirical data. Also no difference to Ethical or Green Investing sectors, such that let the members to have the option for opting in or out of this sector.

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