First home buyers accessing super to rise CQ property prices
A proposal to allow first home buyers to access their superannuation for a house deposit will be “like throwing petrol on a bonfire” for Central Queensland property prices.
These are Industry Super Australia’s ISA thoughts on a push by Victorian federal coalition backbencher Tim Wilson and other MPs for the scheme to be legislated.
An analysis by ISA found median property prices in capital cities could jump by between 8 and 16 per cent, if first home buyers were allowed to access $40,000 from superannuation.
The news comes on the back of statistics showing the property market hit a record high in January, with banks predicting double-digit growth this year.
Central Queensland is currently experiencing a rental squeeze, according to the Residential Tenancies Authority, with vacancy rates below two per cent in Rockhampton and Gladstone.
This, combined with record low interest rates, has seen more and more people try to become homeowners, as it is often cheaper to pay a mortgage than to pay rent.
ISA Chief Executive Bernie Dean said the analysis confirms what experts have said for many years.
“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,” Mr Dean said.
“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.”
Grattan Institute’s Household Finances Program Director Brendan Coates echoed Mr Dean’s views.
“The more people we allow access to their super to buy a house, the more you’re adding to demand for housing,” Mr Coates told media last month.
“And the more you add to demand for housing, particularly in a world where supply is constrained by the planning system in our major cities, the more you will push up prices.”
The winners if the scheme was introduced, said the ISA, would be the banks reaping the mortgage windfalls, which could result in taxpayers paying billions into the aged pension.
Potential property buyers could be locked out of the market due to the price rises, said the ISA, while people who could enter the market would be lumped with higher mortgages.
Currently the First Home Super Saver FHSS scheme, introduced by the Federal Government in 2017, allows eligible first home buyers to access up to $30,000 in voluntary superannuation contributions.
The FHSS does not permit first home buyers to access employer superannuation contributions, or any other contributions except your own.