‘Policy madness’: Economists warn of super-for-homes price spike
A group of property economists sound the alarm against allowing Australians to use their superannuation savings on a house deposit, predicting a “price explosion” if the plan goes ahead.
A number of federal government MPs, including Tim Wilson, the Assistant Minister for Industry, Energy and Emissions Reduction, has been advocating for Australians to be given access to their super to use in property down payments.
But modelling from a new McKell Institute report shows the plan has the potential to add nearly $69,000 to the price of the average house in Sydney, $108,000 in Melbourne, and $159,000 in Adelaide.
Given that the average returns in a super fund are superior to the average growth in a home, the report also warns that this plan would leave Australians worse off in their retirement years.
The McKell Institute’s executive director, Michael Buckland, said the proposal would “pour fuel on the fire of our housing market at exactly the time when we are desperate for a little calm”.
He also cautioned it would likely cause first home buyers to hand their retirement savings to existing property owners, setting them back at the very start of their retirement savings journey.
“Young Australians need their retirement savings quarantined and compounding. Using these savings to fuel yet another housing market feeding frenzy would be policy madness,” Mr Buckland said.
“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.”
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