Tier 1 and 2 Sector Performance Report 2022

Registrar's Overview

The Tier 1 and Tier 2 community housing sector is diverse and continues to remain viable for the foreseeable future. The number of community housing providers (CHPs) regulated by the NSW Registrar has been growing as the number of new entrants has been consistently greater than the number of cancellations. In this reporting period (1 July 2021 — 30 June 2022) we have seen a net increase of 7 providers being registered across the 3 tiers of registration.

We are seeing a significant increase in the number of Aboriginal CHPs seeking registration. This process is underpinned by the Aboriginal Housing Office's Registration Policy from 2018 which required Aboriginal CHPs to register under the Act by December 2022. The registration of Aboriginal CHPs remains an ongoing priority.

A new property collection data system has been established that has allowed the Registrar's office to report on the total number of Community Housing Properties across the 3 tiers of registration. It is evident on the reported property numbers that the sector continues to grow over time.

The majority of Tier 1 and 2 CHPs are continuing to meet the Registrar's benchmark levels of performance with no significant instance of non-compliance in this reporting period.

Housing Australia (previously the National Housing Finance and Investment Corporation) continues to play an important role in supplying debt finance to support the development of community housing.

The Office of the Registrar has undertaken an analysis on the impact of rising interest rates on the community housing sector. The analysis was based on the information provided by CHPs in their compliance returns for this reporting period. A sensitivity analysis was conducted for Tier 1 and Tier 2 providers, being the providers with the greater risk.

The analysis concluded that the sector is well placed to weather the increasing interest rate cycle. A further analysis will be conducted if the cash rate increases above 4.5%. As at 8 February 2023 the cash rate sits a 3.35%.