This article is from the Australian Property Journal archive
GIVING Australians access to their super to use on a home deposit would see average house prices across the country inflate by as much as $159,000.
According to a new report by the McKell Institute, Mortgaging Our Future, warns that such proposals, as pushed by some members of the federal government could leave many Australians locked out of the housing market.
“Homes have already become unaffordable for millions of Australians and allowing super balances to be spent on house deposits would make things so much worse,” said Michael Buckland, executive director of the McKell Institute.
Liberal MP Tim Wilson’s recent proposal to allow first-home buyers to access their super to fund home deposits has been generally slammed as a way to inflate market prices rather than lower the rate of poverty in retirement as suggested by the MP.
“The Tim Wilson proposal would pour fuel on the fire of our housing market at exactly the time when we are desperate for a little calm,” said Buckland.
The report revealed that such measures would in Sydney see almost $69,000 added to the price of the average house, an increase which is still well below the rest of the country.
In Melbourne prices would be boosted by nearly $108,000, Brisbane by nearly $104,000, Adelaide by $133,4000, Perth by around $112,500, Darwin by circa $81,300 and Hobart by a whopping $159,000.
Meanwhile, the Morrison government last week announced it was extending its Home Guarantee Scheme, to help first home buyers access a deposit of 5% and single-parent households a 2% deposit, with remaining 15% of the typical 20% being guaranteed by the government.
“Super-for-housing would mean first-home buyers handing their hard-earned retirement savings to existing property owners when they would be better off investing them in super.
On top of this inflation, investing these funds into property rather than into superannuation would leave Australians in a worse financial position, with average super returns outpacing that of average home growth.
“Young Australians need their retirement savings quarantined and compounding. Using these savings to fuel yet another housing market feeding frenzy would be policy madness.”
