The nation's treasurers have agreed to develop a new way to encourage investment in affordable rental and community housing, but the Commonwealth is still resisting calls to change tax concessions.
Federal Treasurer Scott Morrison signed off on the development of a new financing model at a meeting with his state and territory counterparts in Canberra.
It will be designed to group together financing requests to generate more investment at cheaper interest rates.
"One of the challenges that is faced by those developing affordable housing is access to longer-term, affordable finance," Mr Morrison said.
"The access to capital is a critical issue for that sector and this would involve the states and Commonwealth working together to act as a bond aggregator to put finance into those developments."
Mr Morrison's focus on rental affordability has been welcomed by the peak body, Homelessness Australia.
"The sorts of devices being discussed to stimulate housing investment at the low end of the market are all the sorts of things we need," Homelessness Australia chairman Jenny Smith said.
"But they're not a magic pudding — they are going to need government support and government investment to work."
The model was recommended by an affordable housing working group, which has also called on Governments to consider other ways to improve affordability and supply, including changes to zoning and planning rules, and taxation and other concessions.
Despite calls from some states to consider winding back negative gearing, Mr Morrison said the Federal Government would not revisit it.
Homelessness body calls on Government to reconsider negative gearing
That view is echoed by the chief executive of Master Builders Australia, Wilhelm Harnisch, who said negative gearing was not just suited to Sydney or Melbourne.
"Negative gearing provides rental properties in regional and rural towns, where those workers who are mobile, and want to move around, have affordable accommodation," Mr Harnisch said.
He welcomed the policy focus instead on new finance models for affordable housing.
But Homelessness Australia said the Government should reconsider negative gearing.
"Ninety-three per cent of them are purchasing existing properties, they are not adding to the supply of housing which is part of the solution," Ms Smith said.
Morrison eager to help in the fight against homelessness
The treasurers' meeting also discussed the $115 million partnership agreement between the Commonwealth and states and territories which funds critical homelessness services.
The current agreement expires mid-2017 and Ms Smith said they were anxiously waiting for an announcement about the next agreement.
Mr Morrison said the Government would make an announcement about the next agreement when it is in a position to do so.
