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Housing Affordability Fund

Overview of the Housing Affordability Fund


Housing affordability is at historic lows in Australia. Government intervention is required both to increase the supply of houses being constructed and to improve the efficiency of the housing market. Such action will help to reduce the impact of these issues on home buyers in Australia.

The Council of Australian Governments (COAG) Housing Working Group agreed in March 2008 to a strategy aimed at addressing housing affordability that included the implementation of five key housing initiatives:

  • A Housing Affordability Fund (the Fund) to streamline development approval processes and reduce infrastructure charges and regulatory costs.
  • A National Rental Affordability Scheme (NRAS) to increase the supply of affordable rental housing, reduce rental costs for low and moderate income households, and encourage large scale investment and innovative delivery of affordable housing.
  • A Land Audit to facilitate improved housing supply through the identification of surplus Australian, State and Territory land for possible release for housing development.
  • A National Housing Supply Council to provide research, forecasts and advice to the Australian Government and COAG on issues relating to the adequacy of housing and land supply to meet future needs
  • A Place To Call Home to deliver 600 new dwellings for homeless people

What is the Housing Affordability Fund?

The Housing Affordability Fund (the Fund) is a five year, $512 million investment by the Australian Government that will help to reduce the cost of new homes for home buyers.

This new program will address two significant barriers to increase the supply of affordable housing:

  • The ‘holding’ costs incurred by developers as a result of long planning and approval times, such as interest paid to banks while waiting on development decisions by councils
  • Infrastructure costs, such as the laying of water pipes, sewerage, transport, and the creation of parks

The Fund will assist State, Territory and local governments, in conjunction with the private sector, to address these market barriers and ensure that savings generated from the Australian Government investment are passed on to the new home buyer.

Funding will be targeted to areas that are experiencing high dwelling demand, or that are likely to experience high dwelling demand, over the next five years.

The desired outcomes of the Fund are to stimulate the supply of new houses and make housing more affordable by:

  • Encouraging best practice in local government in respect of residential development assessments and planning processes
  • Speeding up development assessment processes to reduce the costs to developers associated with the time taken to approve a development, and ultimately the costs that flow through to the home buyer
  • Reducing the burden of infrastructure charges on developers in order to generate savings for purchasers of new entry-level and moderately priced homes.

A separate funding process is underway to progress the implementation of electronic development assessment (eDA) processes and related IT infrastructure proposals.

What is the focus of the Housing Affordability Fund?

The Fund will target greenfield and infill developments where high dwelling demand exists or is forecast for the next five years. Applicants will need to show how cost savings resulting from the Australian Government funding will be passed on to new home buyers and how reforms will be achieved. Priority will be given to proposals that make the greatest impact on the supply of entry-level or moderately priced housing.

What are the planned outcomes for the Housing Affordability Fund?

The Fund will increase the supply of housing and reduce the purchase price of homes, particularly entry-level or moderately priced homes.

Funding Available

In the 2008-09 Budget, the Australian Government announced a total of $512 million in funding to be spent over five years to implement the Fund. This includes $500 million in available funds and an additional $12 million in funding to cover the administration of the program.


Year/Funding source 2008-09   2009-10    2010-11   2011-12   2012-13  
Funding Availible ($ million)507575 150 150 

The Australian Government has committed $30 million of the Fund to assist with the implementation of eDA systems and online tracking services nationally, which will reduce red tape and streamline development approvals.

Applications for eDA funding will not be accepted under this first funding round. Funding for eDA will be allocated principally from the 2008-09 and 2009-10 Fund allocation.


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