Residz Team 3 min read
Saving a deposit when you have rent to pay is one of the hardest tasks for wannabe first home buyers. The average number of years it takes to scrape and save a 20% deposit to buy a home in Australia is estimated at 5 years and 10 months. In Sydney and Melbourne it’s over 7 years. (Finder)
So, is the Liberal National Party’s Super Buyer Scheme idea to allow first home buyers access to their superannuation to top up deposits a good idea?
Independent economist Saul Eslake, quoted in this Guardian article, doesn’t appear to think so. He says the Coalition’s policy makes him “want to scream.” His reasoning is that policies allowing Australians to pay more for housing than they otherwise could resulted in higher house prices, not higher levels of home ownership.
And on ABC Radio National, former Labor Minister and now Chair of Industry Super Australia Greg Combet told breakfast show host Patricia Karvelis he rejected the scheme, saying superannuation should remain for retirement income.
The Super Buyer Scheme is available to first home buyers who have saved a 5% deposit. To increase their deposit they will be able to access up to 40% of their own superannuation (up to $50,000 maximum) which is returned to their super if and when they sell the house. It will kick off on July 1, 2023, if the Coalition is re-elected.
Even the Government’s own Minister for Superannuation Jane Hume had to concede the scheme would “temporarily” increase house prices because people would bring forward their plans to buy a home.
There is evidence for this scenario, as Richard Denniss, Chief Economist at think-tank The Australia Institute spelled out in his tweet “In March, a Parliamentary Committee looking at housing affordability, Chaired by Liberal MP Jason Falinski, found letting people withdraw super to buy a house would “likely increase demand and lead to higher property prices”.
Prime Minister Scott Morrison says this would be balanced out by an increase in larger houses being put on the market due to his downsizing policy.
However, comic and TV personality Shaun Micallef tweeted that he didn’t understand the logic of this. He said he was old, and if he downsized he’d “still have to live in a house.” This would be “competing with young people in the same market”.
Against the LNP’s claim of a domino effect of downsizers putting large homes on the market, Shadow Housing Minister Jason Clare says the Super Buyer Scheme would "add fuel to the fire" of house prices, and drive them up. (ABC) He’s also said that people struggling the most to enter the housing market would not be helped due to their low superannuation savings. “You shouldn’t have to raid your super to buy a home...” Mr Clare tweeted.
Responses to an article on the Super Buyer Scheme “did not include a single positive comment” tweeted political journalist Tom Crowley from TheDailyAus. And, when this blog writer searched Twitter for “Super Buyer Scheme praise”, I got the rubber chicken and “no results” message.
Economist Leonora Risse tweeted a table from the Financial Review showing average superannuation account balances of males and females at different ages (data from the Australian Bureau of Statistics). “Women's lower super balances, at every age, means this policy simply provides further financial advantage to men,” she wrote.
For a twitterer called Positive Patrick, it’s all part of the pre-election circus and both sides are at it.
“With Anthony Albanese's bucket loads of jobs! And Scott Morrisons idea of young first home buyers, tapping into their super. There shouldn't be a problem! Always plenty of jobs, jobs, jobs! Always plenty of money, money, money! A win win for everyone! Sorry! I've just woken up!”
Image: Martin Kingsely, Cashmoney, Wikipedia