Australians' Superannuation Funds Invest in London's Housing Boom
Australian superannuation funds are pouring money into international housing projects, including a massive "new town centre" development in London called Canada Water. This project promises 3,000 net-zero homes, office spaces for 20,000 workers, and a vibrant retail precinct. AustralianSuper, the country's largest fund, has invested hundreds of millions of dollars in the project.
Meanwhile, Australia faces a severe housing crisis. The Business Council of Australia estimates that 1.2 million new homes are needed over the next five years to address the national housing shortage. Despite having a superannuation industry worth $3.9 trillion, only 6.7% of these funds are invested in the Australian property market.
AustralianSuper has over $4.5 billion invested in international property markets, compared to $8 billion in Australian and New Zealand properties. Aware Super, Australia's third-largest super fund, has invested over $10 billion in the UK and Europe.
An Australian delegation recently visited London to study the city's approach to housing and attract investment. They concluded that both London and Sydney face similar challenges in keeping up with population growth. However, they believe Australia needs more ambitious projects to attract major investors.
The delegation compared the Canada Water project to the Moore Point development in Liverpool, Sydney. Moore Point promises 11,000 homes and 23,000 jobs, but it has faced delays and bureaucratic hurdles.
The Australian government has acknowledged the housing crisis and is taking steps to streamline planning and approval processes. They have also passed a build-to-rent bill to incentivize institutional investment in rental housing.
However, some believe that more needs to be done to attract investment and address the housing shortage. They call for a complete overhaul of the planning system and increased government efforts to attract global funds.