Is a move to raid super for house deposits a trap?

Experts warn that rumblings of a Coalition push for uncapped usage of super for house deposits would only make young Australians wait longer to own their first home.

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The Super Members Council (SMC) has declared that encouraging young Australians to utilise their super for a house deposit will only result in a massive house price hike.

New analysis has revealed that the median super balance of renters in their 30s is $40,000 for an individual and $70,000 for a couple.

Under such a scheme, if a couple were to exclusively use their super to buy a home, it would not be until their late 40s that the typical renter would have a higher super balance than the average $110,000 deposit of a first home buyer.

Recent reports have suggested that unspecified Coalition MPs are lobbying to expand the scope of the existing “super for a house” policy proposal through uncapping the threshold for super withdrawal.


SMC CEO Misha Schubert decried this alleged reform as “economically reckless” in that “it sets a trap that would make it even harder for future generations of young Australians to realise the great Australian dream of owning a home”.

“Politicians would be shirking their responsibility of fixing the housing crisis, instead telling young people they can either have a house or save for retirement but not both,” Schubert stated.

Further illustrating the issues with the proposal, the SMC said only two in 10 renters in their 30s have more super than the average first home deposit of $110,000.

It echoes recent analysis of the Australian Bureau of Statistics data which showed few younger renters have enough super to help build a deposit.

As opposed to helping younger Australians to enter the housing market, Schubert believes that wealthier, older renters would use their super and other assets to pay much higher prices for the same properties younger Australians are aspiring to purchase.

“We all desperately want more Australians to own their own home, but this idea won’t achieve that it would just make that goal even harder for first home buyers by making house prices more expensive.”

“For many Millennials and Gen Z, that policy idea would turn the dream of home ownership into a nightmare and force them to rent for longer,” Schubert concluded.

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