Building wealth vs artificially stimulating the property market – This month we ask ... should first home buyers be able to use superannuation for a deposit?
Protecting the investment for retirement
A first home buyer’s superannuation probably hasn’t amounted to a great sum, so investing this in the purchase of a first property to build future wealth could be seen as a good choice. My concern is how they then protect the investment in the property. What if they sell the property? Is there then a requirement to place a caveat on the property to ensure that sum is reinvested back into
another property or back into the super fund?
Glenn English, Aussie Carnegie
Shifting costs to the golden years
Allowing the withdrawal of super for this purpose transfers the onus from people saving and other issues around housing affordability to a solution of accessing your longer term safety net to buy a property now, which if not managed properly, will cause significant problems 20 or 30 years down the track. This may be seen as a solution now rather than addressing the more important question of why we need to access our super to ease home affordability.
Saving hard for those new to the workforce
I believe this would work on a limited basis, maybe restricted to first home buyers under the age of 30. Younger people starting out in a career are usually on lower wages and by the time they pay rent (which
can be the same amount as a mortgage payment) and living costs, there is not much disposable income left for savings. Accessing funds from super would allow younger buyers to
enter the market sooner and they still have 30 years of working life left to accumulate the super.
Scott Christie, SPC Finance
Not the government's responsibility
I actually think it’s a really bad idea. If individuals were serious about buying a house, they would take measures to save the deposit required by reconsidering where they’re living, how much rent they’re paying, what their expenses are, reducing luxury items, entertainment and going out. Also taking up second jobs or secondary employment. I really don’t think it’s the government’s responsibility to be dipping into retirement
funds so that people can buy houses.
Nicole George, Kobella Finance
Inflating the property market
I can see merits to both sides. It’s difficult to enter the market with prices increasing. A strategy could be developed whereby superannuation was only used for a finite amount of time, maybe 50 per cent of super, but only for a set period of time after which it would need to be replaced. [Conversely], I think we’re artificially increasing demand through the use of superannuation. If I had to make a choice, I think I’d fall on the side of not wanting to artiificially stimulate the property market.
Troy McEvervale, Freedom Home Loans
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