Funds need to invest in housing, says Australian Super chair Heather Ridout

Funds need to invest in housing, says Australian Super chair Heather Ridout

Reserve Bank board member Heather Ridout has backed a greater role for institutional investors in funding more affordable housing.Ms Ridout, who also chairs Australian Super, told a panel at a Citi conference, that the fund had invested in social housing in London, where it has backed residential development projects that include social housing.  Annabel Spring, Commonwealth Bank, head of wealth management, Lucy Turnbull, Greater Sydney Commission, chief commissioner and Heather Ridout, Reserve Bank of Australia, board member speaking on a state of Australia panel discussion at the Citi conference. Photo: Louise Kennerley She stressed that social housing included homes for people with jobs such as police officers or teachers, who were struggling to break into the market, not only those who were  struggling financially.Lucy Turnbull, chief commissioner of the Greater Sydney Commission, said this was a key difference in Australia compared with overseas. She also said that greater institutional investment in housing, alongside stronger legal protections for tenants, could help to make renting a more attractive option. “One of the things that actually fascinates me is why in Australia there isn’t an institutional asset class for build-to-rent housing like there is other developed economies,” she said.”As housing gets more expensive the attainability of having your own terrace house in Paddington becomes really impossible for a lot of people.”

The discussion of housing and affordability came after an earlier speech from Reserve Bank governor Philip Lowe acknowledged that the central bank took into account the impact of very low interest rates on people who relied on returns from savings held in bank accounts.Commonwealth Bank wealth management boss Annabel Spring has highlighted the negative effects of record low interest rates for social equity, saying a low-yield world also tends to be a more unequal one.The comments underscore the limits of relying on very low interest rates to stimulate growth in the econom…

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