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Urban Affordable Housing Association.

First the people:

They seem very decent people who have spotted this opportunity and are determined to develop it. To date they have worked through Financial Planners, who are abundant in Australia, to sell these properties to investors and they are now trying to expand from that base. That is were we come in as well as some real estate agents in Australia. The investors do not need to be either residents or Australians.

The Way it Works:

The Commonwealth government has a scheme to subsidise rents for people who earn less than a certain amount for a couple it is about $59,000. This currently is $9,140 p.a and it is indexed to the Rental CPI, currently 2010 it is 5.3% . The subsidy period runs for ten years. However it can be terminated.

The properties are then rented to people who qualify at a reduced rental of 80% of the market rate. So obviously the cheaper the house the more value the subsidy is. If a tenant becomes ineligible they have to leave and a period of 12 months is allowed for them to move. Like Brunei it’s a government housing scheme that has many times more applicants than it does houses.

How the UAHA works is this, they talk to developers and obtains an allocation in their development at a discount to the advertised price, UAHA say it is around 6% . Obviously when sales are slow it can be more and when they are hot the developers won’t play ball. But in a development of 150 units UAHA might be allocated 40 or 50 properties.

Each year the government calls for properties and UAHA and its competitors offer properties to the government. A selection process occurs and each offeror is told how many properties he can place into the scheme. The criteria for this I did not discuss, but it is fairly obvious, it is a combination of where demand for subsidised homes is highest and the money available to the scheme.

UAHA is different to it competitors in that it has commercially built...