The National Rental Affordability Scheme explained

Across Australia, housing our growing population in areas close to centres of employment, essential services and desirable amenities is becoming increasingly difficult to do in an affordable way - as a result people tend to seek more affordable areas to live further away resulting in longer commutes, less time for people to spend with families or on social activities.

Providing additional amenity in these areas usually takes a long time and costs a lot of money to develop and unfortunately, in today's political climate, will only be developed if these areas are in marginal electorates. I'll leave that discussion for another time.  To combat the housing affordability issue in a more timely and effective manner, the Federal Government created the National Rental Affordability Scheme (NRAS) which commenced in 2008.  It seems to provide a method and incentive for Australian property investors to buy new property (off the plan), whilst stimulating the economy, building industry nationally and improving the availability of quality rental housing in more desirable areas.  

According to the NRAS Australia website, The NRAS has been designed to:

  • encourage investors to develop additional new houses for the rental market.
  • provide an affordable rent program for average Australian wage earners as individuals, couples or families. It is not social housing.
  • yield higher than usual returns for investors in the residential property market.
  • increase the number of rental dwellings built through the stimulation of demand and investment, while supporting the building industry, related jobs and the Australia economy.
  • The Government aims to achieve this by providing a tax incentive for investors in NRAS properties in return for the properties being rented at a discounted rate.

It is important to stress that NRAS properties are not designed to be social or housing commission style properties, but more so, they are designed to provide accessibility to affordable rental housing for low to moderate income tenants.  One example of the importance for this scheme is to provide professionals in the essential services sector - such as ambulance officers and firefighters - who need to live close to their work place.

Due to the popularity of NRAS properties, a series of strict guidelines are in place to ensure the people who need these types of properties most are catered for accordingly.  NRAS properties are overseen by NRAS tenancy managers who assess tenant incomes upon initial application and do so on an ongoing basis, ensuring the scheme remains relevant to those most in need.

The NRAS is funded by the Federal Government for up to 50,000 dwellings and will come to an end for new investments on 30 June 2016. Owners of NRAS properties will continue to have access to the tax incentives on offer as part of the scheme for 10 years post the land/strata title transfer date.

 

Sources and further reading

http://www.fahcsia.gov.au/our-responsibilities/housing-support/programs-services/national-rental-affordability-scheme

http://www.nraspropertydirect.com.au/

http://www.nrasaustralia.com.au/national-rental-affordability-scheme-nras-property-what-is-nras

 

Development & Planning

Wednesday, December 13, 2017 - 12:00
The swirl of development activity in Footscray has found another gear as new projects are submitted for approval, or are on the verge of beginning construction. Two separate planning applications have been advertised by Maribyrnong City Council; their subsequent addition to the Urban Melbourne Project Database has seen the overall number of apartment developments within Footscray in development swell to 40.

Policy, Culture & Opinion

Monday, November 20, 2017 - 12:00
The marriage of old and new can be a difficult process, particularly when the existing structure has intrinsic heritage value. In previous times Fitzroy's 237 Napier Street served as the home of furniture manufacturer C.F. Rojo and Sons. Taking root during 1887, Christobel Rojo oversaw operations though over time the site would become home to furniture manufacturer Thonet.

Visual Melbourne

Friday, August 25, 2017 - 07:00
The former site of John Batman's home, Batman's Hill is entering the final stages of its redevelopment. Collins Square's final tower has begun its skyward ascent, as has Lendlease's Melbourne Quarter Commercial and Residential precinct already. Melbourne Quarter's first stage is at construction and involves a new 12-storey home for consultancy firm Arup along with a skypark.

Transport & Design

Friday, December 15, 2017 - 11:00
Infrastructure Victoria unveiled a new round of research into its larger programme of work dealing with managing transport demand. The authority contracted Arup and KPMG to produce the Melbourne Activity Based Model (MABM) and while it is new, it is considered fit for purpose in the strategic context.

Sustainability & Environment

Tuesday, October 24, 2017 - 12:00
Cbus Property's office development for Medibank at 720 Bourke Street in Docklands recently became the first Australian existing property to receive a WELL Certification, Gold Shell and Core rating. The WELL rating goes beyond sustainable building features with a greater focus on the health and well-being of a building's occupants.