Australians have invested $1 billion to create affordable housing — not here, but in the United States.

That is the assessment of Daryl Browning, the CEO of Industry Superannuation Property Trust (ISPT), one of Australia's largest property fund managers.

Individuals are not choosing to put their money into the American affordable housing market, but Australian superannuation funds and investment houses are doing it for them.

"It's not a deliberate ploy," Mr Browning said.

"I think there just haven't been the opportunities to do it in Australia."

The investment companies are not to blame.

Their primary objective is to get a return on investment for their members, and the reality is Australian investment funds can get a decent return backing social housing and build-to-rent projects in the US while they cannot make money from it in Australia.

"In Australia the scale hasn't been there and the returns haven't been there, so it hasn't attracted institutional scale investment as yet," Mr Browning said.

Treasurer Scott Morrison acknowledged it was a problem and one not just confined to investment in America.

"Australian super funds are investing in affordable housing in the UK," he said.

The Treasurer said he hoped his housing affordability package with investment incentives and a 60 per cent discount on capital gains tax for community housing projects would start to redress the imbalance.

"There is capital available to invest in these projects but in Australia we haven't seen that at the scale that we have in other countries," he said.

The capital is there, Mr Morrison said, but not the scale. ( AAP: David Crosling )

Supply targets 'the focus'

Michael Lennon, the managing director of Housing Choices Australia which provides 3,000 properties to those in need, welcomed the package but said it must go further.

"What we have to focus on is supply targets," he said.

Mr Lennon believes current negotiations to replace the National Affordable Housing Agreement will be crucial for the future.

"That will specify contributions to be made by Commonwealth, state governments and the market and we say should also set targets for the growth of the community housing sector," Mr Lennon said.

Mr Browning hopes the investment in the United States will ultimately lead to more affordable housing in Australia.

"It should be seen as a positive because the experience of the successful investment in the model in the US has, I think, led people to create interest in a similar product and opportunity in Australia," he said.

Mr Browning said there was plenty of money ready to be invested in Australian affordable housing if the Government pulled the right levers, but he warned the consequences of getting it wrong would be dire.

"The risk is we're going to face a massive social problem five,10, 15 years out," he said.