AI technology identifies opportunities
Data and analytics company PointData has identified opportunities for governments, private equity and housing providers to unlock more than 1.3 million new social and affordable housing dwellings nationally and experts say brokers will have a role to play in matching homes with borrowers.
The housing, located at 1.76 million infill sites across the country, were identified using AI technology, and may represent opportunities for brokers wanting to work in this low-cost housing space.
While social housing is usually made available for people seeking properties to rent at below market costs, affordable housing is sometimes made available for sale to people unable to afford to buy in an open property market.
According to the PointData information, there are currently 640,000 Australian households where housing needs are not being met, including 160,000 low-income households on waiting lists across Australia, and more than 400,000 families/individuals currently experiencing unmet needs for social housing.
Blake Buchanan (pictured above left), general manager of broker aggregator Specialist Finance Group (SFG) said housing and land shortages were not “new” news but he blamed bureaucracy for the housing issues faced by many today.
“Opening up low cost and affordable housing is a start and whilst it won’t suit everyone it can assist with inflated markets (price), shortages and getting into a home sooner as a stepping stone or building blocks for your preferred properties down the track,” Buchanan said.
“Identifying 1.3 million immediate opportunities for these properties is great, but with the skills shortages and recent building company collapses, who do they plan will build them?”
Buchanan said when it came to finance initiatives, brokers had been at the forefront of client education and lending accessibility, particularly in the last two decades.
“Much the same as the NDIS, SMSF, DHA, First Home Buyer and other out of the box lending schemes, brokers have always been the most resourced to assist clients and will continue to be.
“No doubt there will be a percentage of brokers who will look to specialise in this space from a marketing perspective, but brokers generally will all be able to assist.”
Buchanan said despite brokers’ willingness to work in the low-cost housing market, it boiled down to the lenders’ appetite for these properties and any special conditions that might be attached to the purchase.
“Depending on the lender risk for these properties, you may see the government incentivise lenders to offer products to cater to this market,” he said.
“If this is the case, whilst in recent times we have seen the government take steps to ensure that consumers can access these products and incentives through the broker channel, we would need them again to consult with our channel and ensure the same.”
MFAA CEO Anja Pannek (pictured above centre) said brokers played an important role in helping borrowers secure finance, no matter how large or small an amount they wanted to access.
Pannek said with mortgage brokers assisting more than two thirds of homebuyers with the process of selecting and securing a home loan, their assistance extended well beyond simply finding the loan with the best rate – it was about providing support and guidance throughout the entire property-buying experience.
“New borrowers rely heavily on mortgage brokers for choice, experience and convenience and importantly understanding all of their options in entering the home loan market,” she said.
“We know that first home buyer schemes are also highly dependent on mortgage brokers, with brokers facilitating 72% of the Home Guarantee Schemes (comprising the First Home Loan Deposit Scheme, New Home Guarantee and First Home Loan Deposit Scheme.)
“As such we have consistently emphasised it’s critical that borrowers are looking to access affordable housing schemes such as the federal government’s Help to Buy Scheme, are able to do so through a mortgage broker.
“The design of all such schemes must encompass access through brokers.”
PointData CEO George Giannakodakis (pictured above right) said understanding the physical value of land and how it responded to planning changes, location, and market drivers, and to forecast how it changed over time, was fundamental to driving evidence-based policy changes and leveraging a portfolio of assets.
“We are pleased to see a very public commitment from governments to fund more than 1 million homes across the country by 2028, however, our whitepaper clearly outlines the financial impacts on the ‘developability’ of land and growing costs associated with building new homes,” Giannakodakis said.
“Core to solving housing affordable is ensuring any allocation of funding or investment is financially viable and sustainable for all parties.
“PointData has applied its Property-AI model to identify opportunities to unlock social and affordable housing across the nation.
“While greenfield developments have historically been doing most of the heavy lifting to fulfil local and immigrant population growth, our AI engine has identified 2.6 million potential social and affordable housing assets nationally that could be generated from 1.76 million infill sites, located in established suburban areas.”
Giannakodakis said while restricted resources and construction supply chain issues remained a barrier, governments could make exceptions to fast-track approvals for social and affordable housing, “especially when the asset is owned by them and where they are able to over-ride local government provisions”.
While the NSW government’s 2023-24 Budget allocates $2.2 billion to accelerate the construction of new homes, there is speculation that not enough is being done to address the state’s housing crisis.
Locations all over Australia are crying out for more housing with one of south-east Queensland's fastest-growing cities, Logan, facing a significant shortfall of 2,500 housing lots per year due to the high demand surpassing the available supply, according to new research from RPM Group.
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