NAB promises to lend $60b to address Australia’s housing crisis
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The news: National Australia Bank said it wants to lend at least $60 billion in the next five years to help address Australia’s housing crisis.
The numbers: In a open letter to customers, government, developers and other stakeholders, NAB NAB CEO Andrew Irvine today announced the bank’s goal of providing at least $60 billion in financing to boost housing affordability by 2030.
The plan would comprise $30 billion in financing to boost supply of commercial real estate development projects where the underlying use is predominantly residential, and all financing of specialist accommodation, including build-to-rent, student accommodation, land lease, and community housing, and $30 billion in financing to support first home buyers via the Australian Government 5% Deposit Scheme.
This would aim to support both supply and demand challenges and could support around 55,000 loans for first home buyers and the development of around 50,000 new homes, NAB said.
The context: In the open letter, Irvine wrote that housing is Australia’s biggest societal and policy challenge and that they country is not building enough homes to provide access to housing for all Australians, let alone achieve the dream of home ownership
“NAB recognises and embraces the opportunity we have to address this challenge”, he wrote.
In an interview with the AFR, Irvine said: “Building homes is being held back,” he says. “It’s being held back by complicated rules, by slow approvals, by poor co-ordination, not enough tradies, all leading to high costs. There are simply not enough homes being built to guarantee access to housing for all Australians.”
Irvine also told the masthead that NAB plans to supplement the bank’s balance sheet with third-party capital from superannuation funds, sovereign wealth funds and other large institutional investors. “Australian energy and Australian real estate are both asset classes that are interesting to those investors,” Irvine said. “That’s the real innovation here, that is why we think we could actually do even more.”
