Australians’ hard-earned money is funding the construction of a mammoth “new town centre” development in London and helping to meet the city’s housing shortage.

The enormous Canada Water project promises 3,000 net-zero homes, office spaces for 20,000 workers and a lush retail precinct and it’s just an example of international projects Australian superannuation funds are investing in.

AustralianSuper, the country’s largest fund, is funnelling hundreds of millions of dollars into the development in the vibrant up-and-coming area at the same time there’s a need for the same kind of investment to plug the housing crisis at home.

Australian super funds are investing billions in housing projects at home and abroad.

The super funds investing millions overseas

In March 2022, AustralianSuper announced its 50:50 partnership with UK property developer British Land to bring the project to life.

Nestled in between the network of freshwater docks and waterways in south-east London, the 21-hectare Canada Water features sizeable public spaces, pools, sports courts, retail and leisure spaces and the “first new town centre developed in the city in the last 50 years”.

The fund’s initial investment is valued at more than half-a-billion dollars.

Meanwhile back home, Australia’s housing crisis is in full swing.

According to Business Council of Australia, the housing industry needs to produce “1.2 million homes over the next five years to address the national housing supply crisis”.

It takes money to build homes and superannuation funds plenty of it.

As of 2024, the superannuation industry is worth about $3.9 trillion but only about 6.7 per cent of that goes into the property market — a 10-year low.

And not all of it is invested in the Australian property market.

AustralianSuper has more than $4.5 billion in the international property market — in the UK and North America — compared to more than $8 billion in Australian and New Zealand properties.

“AustralianSuper has made a nearly $500 million equity commitment to assemble build-to-rent-to-own projects, with the expectation to deliver more than 1,400 homes by 2027.”

In November last year, Australia’s third-largest super fund Aware Super announced it invested more than $10 billion in the UK and Europe.

The company now owns a 22 per cent stake in major UK developer Get Living, which currently manages close to $6 billion in build-to-rent properties in the UK.

Aware Super already has $2.5 billion invested in the international property market and $7.5 billion in the Australian property market.

Why not invest it all here in Australia?

An Australian delegation made up of 23 business leaders, academics, urban planners and various consultants, recently visited London to study how the east part of the city is dealing with its housing woes and why it’s attracting Australian investment.

They concluded both London and Sydney are facing the same challenge of delivering enough housing to keep up with population growth.

Leading the delegation, Western Sydney Leadership Dialogue chairman Christopher Brown visited the Canada Water project and said Australia should be attracting more investment locally.

Mr Brown believes the way to retain big money investors is more ambitious projects.

“Major investment begets more major investment. Scale is grand,” he said.

“Let’s stop fiddling around with half-a-dozen apartments here and a couple of houses there. We need regeneration and urban development on a global scale.”

He compared the Canada Water project to the Moore Point development in Liverpool, in south-west Sydney.

The project promises to deliver 11,000 homes and 23,000 jobs, with at least 10 hectares of public spaces along the river.

“Ten years in, this project has finally been given the right to go on approval for the public to have a say, and that’s with a supportive council,” Mr Brown said.

Moore Point, which is owned by Leamac Property Group and Coronation Property, has finally reached the public exhibition phase.

Mr Brown has called upon all levels of government to overhaul the planning system so that it “doesn’t take 10 years to get from conception to exhibition and then another 10 years to develop”.

“Premier, prime minister, get on the plane, go overseas and bring global funds in here.”

The Moore Point development website said it would take 40 years to complete their project.

The red tape dilemma

According to the federal government’s 2024 budget papers, Australia “has among the lowest number of homes as a proportion of the population in the OECD”.

Coupled with “slow” planning and zoning practices and “a long-term, chronic under-investment in social housing”, the treasury documents paint a picture of a supply chain bottleneck.

Housing Minister Clare O’Neil acknowledged the problem and said “the government has galvanised a renewed effort across all states and territories in streamlining planning and approval processes”.

The federal government this week passed its build-to-rent bill through parliament.

It aims to increase build-to-rent housing supply by offering investors tax concessions if they build those types of developments.

Ms O’Neil said the bill would make renting “more affordable and give renters more choice by increasing institutional investment into rental stock”.