Should first home buyers be able to use their super?

News reports this week say some Coalition MPs are lobbying for first home buyers to get on the property ladder by accessing some of their superannuation savings.

Under the proposal, the would-be buyers would have access to some of the banked employer super contributions equal to their voluntary payments, which could then be used as a deposit on a first home.

But there are also fears that such a move could further inflate the already overheated property market, particularly in Sydney.

Do you think young people should be allowed to dip into their super to help finance a home deposit? Or should they keep their super for their retirement and stay in the rental market longer?

Comments   7 Comments

We have a consensus. The purpose of super is to fund retirement. It may be hard for some people to have the funds locked away for decades but it is necessary and the time will come when today's younger people will need all the super they can get. I expect life will be harder for them in older age than it is for us now.

There are other ways noted in other posts to improve housing affordability but these are really just tinkering around the edges. It really is all about demand and supply. Demand will stay high in Sydney and Melbourne in particular and other cities are not that far behind. Young people wanting to buy a home have a much harder time than we did a generation ago, and it was harder for us than for our parents. It simply won't get any easier.

Of course having a group of oldies telling the next generations "tough luck, suck it up" is hardly going to make them feel any better and will just add fuel to the myth that we are the selfish generation. BG.

The concept of superannuation is to allow workers to save for their retirement! If on retirement it is deemed that savings are not sufficient there is the pension to make up for a decent living. Given that the Australian over 65's will be crowding up the health and community space in (say) 20 years those with first home buyer ambition better start saving hard.This country is not a nanny state and people should be working for their needs and save for the home deposit..
"Overheated property prices in Sydney" - often quoted in the press is rubbish! There are other centres in Australia where one can make a living - so move on and have a life.

Allowing people to withdraw super for a home deposit does not address the problem. Housing affordability is the real issue here. And drawing down on super is a short term fix creating long term problems.
The government needs to look at the causes of the housing affordability problem. It is no good putting a bandaid on a broken leg, so allowing youth to take from their retirement fund (super) to pay a house deposit is the same. This may give some a deposit, but reduces their ability to fund their retirement creating a bigger pension problem down the track.

Firstly, supply of housing needs to be fast tracked, as developers keep supply in check to maintain high prices. Secondly, we need to stop investors blocking first home buyers. Even the RBA supports removibg negative gearing and CGT discounts. Thirdly, overseas investors are flooding the market forcing prices to rise. We need to prioritise domestic home owners before selling to overseas investors.

NO ... why call it Superannuation if people can withdraw it at will ?

And to be honest, when I was 30, I would not have had much in Super that's for how is it going to help them to take out a few thousand in order to presumably get a huge mortgage which they will possibly strain to pay off ?

Nope ... Withdrawing from Super does not teach potential home owners about saving - it's just another extension of today's society going for a "quick fix" rather than looking at the bigger picture.

Honestly, if people can't afford to save a house deposit, then they may not be able to afford the loan. Interest rates will increase so affordabilty will not improve.

Why should we allow people to withdraw funds from super? This is robbing Peter to pay Paul. Solving todays problem by creating a problem in the future. Future generations will have to pay for more aged pensions, as taking house deposits from super will mean less money for retirees and greater access to the aged pension.

There are many proposals available to improve house affordability. Removing negative gearing and capital gains concessions will do just that, and contribute billions every year to pay off the debt. These taxpayer funded concessions are mainly used by very high income earners. Why are we borrowing billions every year to give away to wealthy taxpayers?

Using super for house deposits is a short term fix, providing a larger welfare problem in future years, billing our grandchildren for our folly.

Bob B is correct. Super has a sole purpose. i.e. the accumulation of funds for a retirement income stream. Allowing payment of home deposits opens the can of worms. Then people will want to access to super for other purposes. Another issue is that using super for house deposits would mean even more people on part or full aged pensions in years to come.

Alternatively, $12 billion annually could be saved by limiting NG to new homes only, and halving the CG discount as Labor proposed. This WILL improve house affordability. Will it happen? No. Liberals oppose it because they benefit from the tax concessions. If we can't afford to pay pensions, surely we can't afford to borrow $12b per year to subsidise the wealth of the rich.

I'm not really on top of house affordability these days though I do understand the implications of the growing number of years of average salary to attain your own home.

Should funds stacked away in super be used to secure the deposit for a first home? Bluntly, no.

Should intending retirees be able to 'squander' super funds and then go on the age pension? Again, bluntly, no. But they do so. So if it's accepted to squander super funds at the end of the contribution cycle, so it follows they could be accessed (under strict controls) during the accumulation cycle for first home procurement.

Do I think this is right? Definitely not! Super is for one purpose only and is a grand purpose that has the problem of not being able to be built up again after using some of those funds for other purposes. Please don't meddle again and tilt the playing field even more.

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