Super for house deposit could increase prices up to 16%

26 February 2021
| By Jassmyn |
image
image
expand image

Allowing first home buyers to access their superannuation for a housing deposit could hike the country’s five major capital city median property prices between 8% to 16%, according to Industry Super Australia (ISA).

Sydney would be the city most affected as it would see a 16% hike in price to a median housing price of $960,000 (from $826,000).

ISA said in most areas the price increases and extra property taxes would surpass the amount of super a first home buyer could withdraw. This meant homebuyers would be paying more but at the expense of their super.

Impact on capital city prices of allowing couples to withdraw up to $40,000 from super for a house deposit

City

Current median price1  

Super price hike %

Median after super price hike

Difference $

 

Sydney

$826,000

16%

$960,000

$134,000

Melbourne

$640,000

9%

$695,000

$55,000

Brisbane

$475,000

8%

$510,000

$35,000

Adelaide

$448,400

8%

$485,000

$36,600

Perth

$435,000

14%

$495,000

$60,000

Hobart

$453,900

6%

$480,000

$26,100

Darwin

$444,500

10%

$490,000

$45,500

Canberra

$613,800

13%

$690,000

$76,200

1The median residential property price is sourced from ABS Cat.6416.0 and our estimate covers both established houses and attached dwellings.

Source: ISA

ISA chief executive, Bernie Dean, said: “This just confirms what experts have been saying for ages; that throwing super into the housing market would be like throwing petrol on a bonfire – it will jack up prices, inflate young people’s mortgages and add billions to the aged pension, which taxpayers will have to pay for.

“Politicians who own multiple investment properties and pocket 15% super might think price hikes are a ‘secondary’ consideration. They don’t care about locking young people into hugely inflated mortgages and a bleak future with hardly any savings to fall back on.

“We need sensible solutions – like boosting the supply of affordable housing which will bring prices down and get young people into a home without lumbering workers with higher taxes in the future.”

ISA noted that taxpayers would be the “loser” if super access was allowed as they would be forced to pay billions more into the Age Pension through higher taxes.

ISA noted Minister for Superannuation, Financial Services, and the Digital Economy, Jane Hume, had joined economists and housing experts in warning against raiding super for housing.

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Co...

1 day ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

1 day ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

1 day 1 hour ago