First home buyers should be able to use their superannuation to enter the property market, one lender has urged.
HomeStart Finance chief executive John Oliver told the Senate Inquiry on Affordable Housing that Australia should look to Canada, which allows borrowers to use up to $25,000 of their superannuation for a deposit and then repay the funds later.
He said this scheme would be especially useful for clients of HomeStart, South Australia’s government-backed lender, which has more flexible lending standards than mainstream banks.
Mr Oliver said a typical HomeStart household purchasing a $300,000 home needs to have about $20,000 in savings – $9,000 for the deposit plus $11,330 in stamp duty.
He added that a person on a $40,000 salary could accumulate that $20,000 through superannuation within five years.
“It is ironic that a household in difficulty with their mortgage has the option to access superannuation to clear arrears, whereas a household in otherwise good financial condition cannot temporarily access their super for a deposit,” he said.
Mr Oliver also told the federal inquiry that the government should set up a HECS-style repayment scheme to help first home buyers meet their stamp duty costs.