First home buyer plan could do more harm than good

“I get a lot of people approaching me saying that young people should be able to use their superannuation to fund a deposit … on their first home,” Mr Hockey said.

Mr Hockey’s proposal comes after independent senator Nick Xenophon said last July that he would recommend a similar scheme to parliament.

Senator Xenophon said the scheme would be like a Canadian arrangement that lets borrowers take up to $25,000 from their superannuation and repay it over 15 years.

Graham Wolfe, chief executive of industry policy and media relations at the Housing Industry Association, welcomed a public debate on the government’s proposal.

“This is absolutely a discussion Australia has to have,” he said. “There are numerous benefits for first home buyers in accessing their superannuation savings, including bridging the deposit gap, reducing the size of their home loan, reducing the LVR and reducing the cost of LMI.”

Mr Wolfe said that as a nation, Australians need to consider looking at superannuation in a different way.

“If superannuation is about preparing for retirement, what better way is there of achieving this goal than opening the door to home ownership,” he said.

However, Century 21 chairman Charles Tarbey said he was opposed to allowing first home buyers access to their super.

“I think super was put in there for a reason and I think it should be left alone,” Mr Tarbey said.

“Buying a property today means that they might get capital gain and it might be good for them, but it also could mean that they make a bad decision and the marketplace could change and they’re in trouble.”

[Related: FHBs ‘copping a bashing’, says Symond]