Last week, Malcolm Turnbull and the Liberals have been fighting amongst themselves about whether young Australians should be allowed to use their superannuation to buy their first home.
On the surface, it may seem like an attractive idea: all that money just sitting there doing nothing, right? Wrong.
The truth is that letting people use their super to buy a home will just push up house prices even further. And it does nothing to increase housing supply.
All it does is put extra money in the market that will fuel a bidding war – driving up house prices. Housing prices already rose 19 per cent in Sydney in the last year. The real beneficiaries of the policy will be the sellers of homes, not the buyers, who are just taking on a bigger debt to buy an overpriced house.
First home buyers will still be competing against cashed up investors. In New South Wales, there’s been a 60 per cent jump in the number of homes purchased by investors in the last three years.
Until we do something about negative gearing and capital gains concessions, first home buyers will always be competing against cashed up investors who get the most generous tax breaks in the world.
Top Comments
For most people, rent costs are probably at least half of their wage, so how does the government expect people in 25+ years to be able to live comfortably (or even minimally) on their own super without having to rely on government pension? If you already own your own home, then that $200,000 super will go a bloody lot further if you're not having to pay rent. I think it's funny that the people who have the means to afford multiple houses can't come up with a legitimate policy that can help the ordinary Australian get into the property market.
How much super are they proposing you could take out? I married a non Australian and in his country, you're permitted to withdraw about 30% to purchase a land or house. That was great for us because he also qualified for stamp duty exemptions. We used the 30% as our deposit to purchase property over there and now we have two there and one in Sydney. Having said that though he is a high income earner so he had already generated a lot of super by the time we purchased it a few years ago.