Is it a viable solution to grant early access to super to put towards purchasing a home?
The first thing we need to come to grips with is whether the access to super should be available irrespective of the number of houses people have owned, or whether it should be restricted to first home buyers. Secondly, just how much should we be able to withdraw – 20%, 50%, or all of our super savings?
The most recent version of the discussion talks about allowing a couple of years of compulsory superannuation contributions – the 9.5% superannuation guarantee contributions – to be diverted and used towards a home deposit. The information that I was looking at required an individual to match their superannuation contributions with personal savings on a dollar for dollar basis.
This would at least encourage people to make a concerted effort to save for their home rather than simply rely on their ability to withdraw amounts already in super.
Allowing access to superannuation savings, or providing other cash incentives including first home buyer grants, stamp duty concessions and the like, will simply mean that more money is available to chase the same number of properties. This means, when our first home buyer goes to an auction on Saturday morning, they will have another few thousand dollars more they can bid and so will the other bidders. The highest bidder will win the prize.
I don’t think that throwing more money at the problem is going to make housing any more affordable than it currently is. Perhaps, part of the solution is to seriously examine the supply side of the equation.
I am not necessarily suggesting we should be creating even more housing stock in our capital cities. An increasing focus on regional development, placing some restrictions on the sale of Australian properties to foreign investors, and changing the tax mix in relation to negative gearing and capital gains tax, might be ideas worth considering.
Source: Peter Kelly | Centrepoint Alliance