In our last snapshot article, Unlocking Potential: The Role of Institutional Capital in Social and Affordable Housing, we discussed the critical role of institutional capital and subordinated debt in the social and affordable housing (SAH) sector. We highlighted the challenges in sourcing and structuring such funding to enable the large-scale delivery of SAH projects and the role that government grants and concessional loans play in that funding.
In this article, we consider whether anything in that analysis has changed following the release of the Federal Budget by the Federal Treasurer on 25 March 2025.
The Budget’s impact on SAH
In its 2025-2026 Budget announcement, the Labor Government provided continued support for SAH projects. The key announcements are summarised in the table below, which also includes a comparison of the SAH budget announcements made in the 2024-2025 Federal Budget:
Initiative | 2025–26 Budget | 2024–25 Budget | |
Increase in Housing Australia’s liability cap | Increase in the cap on the Commonwealth’s guarantee of Housing Australia’s liabilities to $26 billion | Increase in the cap on the Commonwealth’s guarantee of Housing Australia’s liabilities to $10 billion | |
Expansion of the Help to Buy housing scheme (shared-equity scheme) | $800 million expansion of Help to Buy housing program. | $5.5 billion commitment to support 40,000 households with equity contributions up to 40% | |
Modern Methods of Construction Investment to accelerate modular and prefabricated housing | New $54 million funding announcement | Not announced | |
Loan support to Housing Australia | No change from 2024-2025 Budget figures | Increase in the line of credit to Housing Australia by $3 billion supporting its provision of low-cost finance to community housing providers | |
Concessional Financing for Community Housing Providers | No change from 2024-2025 Budget figures | Up to $1.9 billion to support SAH developments | |
Housing Support Program to fund state and territory infrastructure associated with new home developments | No change from 2024-2025 Budget figures | $1.5 billion to support planning, infrastructure and social housing | |
New Homes Bonus incentive payments to states and territories to fund planning and zoning changes | No change from 2024-2025 Budget figures | $3 billion in incentive payments |
Modest moves – no increase to the HAFF!
As the table above shows, this year’s budget does not reflect a significant increased commitment from the Federal Government to support SAH - the increased commitments are quite modest overall.
Perhaps unsurprisingly, a glaring omission from the budget is additional allocation to the HAFF … there is a strong call for an increased commitment to the HAFF to address the overwhelming demand and acute need for secure and affordable housing.
In any event, and as is always the case, alignment and commitment from both sides of politics will be crucial. We sincerely hope that whatever the outcome in the May federal election, the Federal Government will prioritise increased spending in the sector, whether that is an increase to the HAFF, or other federal funding initiatives aimed at supporting the sector as efficiently and effectively as possible – maximising the positive impact for those who need housing the most.