Financial performance

Find details of Victorian registered housing agencies' financial performance in 2021-22.

Under Performance Standard 7 Financial Viability, registered agencies must maintain financial viability by effectively managing their financial risk exposure, maintaining satisfactory financial performance and a viable capital structure.

Registered agencies report a range of detailed financial information to the Registrar of Housing Agencies (Housing Registrar) as part of the annual compliance assessment process. This reporting includes provision of the:

  • Financial Performance Report, containing historical and forecast data, including grants, debt and development projects for each registered agency
  • audited financial statements
  • financial related policies and procedures, including policies evidencing financial risk management.

The Housing Registrar consolidates financial data provided by registered agencies to analyse the financial performance of the sector.

Housing assets

In 2021-22, housing assets owned by the sector grew by $0.79 billion to a total value of $4.84 billion (an increase of 20%). This figure reflects housing owned by the registered sector only and not housing managed on behalf of the Department of Families, Fairness and Housing and other parties.

In 2021-22, the increase in the value of housing assets was driven by both housing asset valuation increases and an increase in the number of housing properties owned by the sector, primarily by housing associations.

Value of housing assets at 30 June 2022 ($ billion)

Value of housing assets composition at 30 June 2022

Operating revenue

In 2021-22, total operating revenue of the sector was $480.9 million.

Operating revenue has increased steadily over the past five years, primarily driven by operating grants received. In 2021-22, operating grants comprised 44% of the sector’s total operating revenue.

Rent revenue accounted for 33% of revenue, with the remainder comprising National Rental Affordability Scheme (NRAS) subsidies and other revenue sources.

Rent revenue increased by 7% in 2021-22, and operating grants received were 17% higher than the prior year.

Note: Where registered agencies provide other services in addition to housing, operating grants for non-community housing services will be included in these figures. Further information on grant funding is provided below.

Operating revenue composition ($ million)

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2021-22 operating revenue composition

  • Download' 2021-22 operating revenue composition'

Operating expenses

In 2021-22, the sector incurred $430.6 million in total operating expenses before depreciation and finance costs.

In 2021-22, the operating expenses to operating revenue ratio was 89.5%, which was lower than 2020-21 but remained higher than previous years.

Property maintenance expenses increased by 21% in 2021-22, in response to the Department of Families, Fairness and Housing Building Works Maintenance Stimulus program grant spending and carryover maintenance which was unable to be completed in prior years due to COVID-19 public health measures.

Note: Operating expenses excludes depreciation and finance costs which are included in the summary financial statements.

Administration expenses increased by 10% in 2021-22, incorporating higher salaries and wages and consultant expenses as registered agencies prepared funding submissions and undertook project management activities to participate in the Big Housing Build.

Finance costs increased by 179% in 2021-22 due to higher levels of debt in the sector to finance development projects.

Operating expenses composition ($ million)

  • Download' Operating expenses composition ($ million)'

Operating earnings before interest, tax, depreciation and amortisation (EBITDA)

In 2021-22, the operating EBITDA margin was 10.5%, an increase from 7.6% in the prior year. This has been driven by an increase in rental revenue, operating grants and other revenue.

Operating revenue increased by 28% in 2021-22 compared with the prior year, whilst operating expenses have increased more slowly (24% in the same period).

This measure will be closely monitored, given the significant projected growth and construction activity associated with the Big Housing Build and as newly registered agencies become operational over the coming years.

Operating EBITDA ($ million) and operating EBITDA

  • Download' Operating EBITDA ($ million) and operating EBITDA'

Grant funding

The sector’s revenue is predominantly comprised of rents, operating grants and capital grants. Operating grants provide funding for the delivery of specific programs and capital grants fund upgrades and development of properties.

The information and charts provided in this section of the report relate to the grant funding portion of revenue as a proportion of total revenue.

In 2021-22, the sector received $403.3 million in operating and capital grants, an increase of 64% from 2020-21. This increase was associated with additional government funding from the Big Housing Build, the H2H initiative and philanthropic contributions.

Operating and capital grants comprised 59.3% of total sector revenue, reflecting the sector’s reliance on grant funding for both operational programs and housing development.

Capital and operating grants ($ million)

  • Download' Capital and operating grants ($ million)'

Grant contribution to total revenue

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In 2021-22, the housing provider sector received the majority of operating grant funding ($137 million compared with $64.1 million in the housing association sector).

Launch Housing and WAYSS Ltd accounted for over 50% of total operating grants received, delivering Victorian Government support for programs addressing homelessness and family violence.

Housing associations received a greater proportion of capital grants due to their increased capacity to deliver growth in the registered agency housing stock.

In 2021-22 housing associations received $129.4 million in capital grants (compared with $64.1 million in the housing provider sector).

Housing First Ltd, Housing Choices Australia Ltd, Launch Housing Ltd and Unison Housing Ltd were the largest recipients of capital grants, accounting for 41% of all capital grants received by the sector.

Grants received 2021-22 ($ million)

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Grant proportion of total revenue 2021-22

  • Download' Grant proportion of total revenue 2021-22'

Registered sector capital expenditure

Project capital expenditure in 2021-22 totalled $148.8 million.

The majority of capital expenditure was in the housing association sector, with Housing Choices Australia Ltd, Loddon Mallee Housing Services Ltd and Women’s Housing Ltd accounting for 70% of total registered sector capital expenditure.

Registered sector debt

In 2021-22, sector debt increased by $127.5 million to $1.15 billion (an increase of 12.5%) reflecting funding of development projects.

Housing association debt increased by $116.4 million, whilst housing provider debt increased by $11.1 million.

The increase in sector debt in 2021-22 followed a significant increase of $625 million (158%) in 2020-21, which was largely due to the registration of housing provider Building Communities Victoria Ltd, which had borrowings of approximately $500 million for participation in the Victorian Public Housing Renewal Program (PHRP).

Registered sector debt at 30 June ($ million)

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Debt composition

Whilst sector debt was higher in 2021-22, the debt to housing assets ratio decreased slightly to 23.7%, reflecting higher housing asset values.

This ratio remains within acceptable levels, with debt predominantly comprised of low-interest Federal Government loans.

In 2021-22, 76% of sector debt was sourced from government loans (Federal or State), with the remainder coming from parent/intercompany loans, private lenders and other sources (such as charity or philanthropic donations).

Registered sector debt composition at 30 June 2022

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Registered sector debt to housing assets ratio

Debt to equity (gearing) ratio

The sector debt to equity (gearing) ratio at 30 June 2022 was 27.1%, largely unchanged from the prior year as both debt and equity increased in 2021-22.

The aggregate sector gearing ratio remains within the Housing Registrar’s preferred benchmark of 30%.

Debt to equity (gearing) ratio at 30 June

Interest cover

The interest cover ratio indicates the extent to which operating earnings can cover interest expenses.

This ratio has declined in recent years and decreased further to 1.7 in 2021-22, despite higher EBITDA in that year.

As above, a significant factor in the decrease in interest cover in 2021-22 is the interest cost associated with Building Communities Victoria Ltd debt, together with higher debt generally throughout the sector.

Finance costs in the sector totalled $30.2 million in 2021-22, compared with $10.8 million in 2020-21.

However, a positive interest cover ratio of 1.7% continues to demonstrate the ability of the sector to meet its interest repayment obligations, and the sector retains significant liquid assets.

Registered sector interest cover ratio


The working capital ratio shows the ability of the sector to pay its current liabilities with its current assets. Note: Excludes capital grants received in advance.

This ratio has decreased in 2021-22 due to a reduction in the sector’s cash balance discussed below, together with higher current liabilities.

A working capital ratio of 3.2% at 30 June 2022 demonstrated that the sector had sufficient current assets to meet its short-term financial obligations.

Registered sector working capital ratio

Cash and short-term investments

Total cash and short-term investments were $549.1 million at 30 June 2022.

This represents a decrease of $211.5 million or 28% from the prior year, mainly due to funds being expended on housing development projects and in support of operational goals.

Cash and short-term investments at 30 June ($ million)

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Capital structure

In 2021-22, equity continued to represent a significant portion of the sector’s capital structure, driven by positive earnings accumulated over time and an increase in housing asset values.

At 30 June 2022, total liabilities (predominantly debt, payables and provisions) of $1.53 billion remained much smaller than equity of $4.25 billion. However, as noted earlier, debt has increased significantly in recent years to facilitate sector growth.

Capital structure at 30 June ($ billion)

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