The opposition's super-for-housing policy could drive up house prices by 9% in major capital cities, according to the collective voice of profit-to-member superannuation funds, Super Members Council (SMC).

The proposed policy would allow first home buyers early access to up to $50,000 of super, as long as its put towards a deposit.

That means a couple purchasing together could see their deposit bumped by as much as $100,000.

The Coalition took the super-for-housing policy to the 2022 election, where Labor emerged victorious. 

Despite its election loss, the party remains committed to the policy, even flagging potential amendments to its $50,000 maximum withdrawal limit.

“We will be recommitting to the policy, in broad strokes,” shadow housing minister Michael Sukkar told ABC Afternoon Briefing last week in response to questions on whether the numbers could be updated. 

"It will be refreshed in the context of what we take to the next election.”

However, using super to bump deposits could do more harm than good for housing affordability.

It could drive Sydney’s median house price more than $78,000 higher to nearly $1.13 million, SMC estimates.

House prices in Melbourne could rise close to $69,000 to $780,500 and those in Brisbane could be bolstered by nearly $78,000 to $787,200. 

“Using retirement savings for house deposits would just unleash a huge price hike,” SMC CEO Misha Schubert said

“That would mean higher and longer mortgages for Australians – and would quickly make capital cities even less affordable for new home buyers struggling to get into the market.”

The claims come amid new Australian Bureau of Statistics (ABS) data showing Australia’s mean house price has surpassed $933,000, climbing $13,400 over the December quarter. 

First home buyer grants, such as the First Home Guarantee and the Regional First Home Buyer Guarantee, typically act to drive up house prices, PRD chief economist Diaswati Mardiasmo told

“The average first home buyer loan has not seen a decline since any of the schemes were introduced, which suggests they are a double edged sword,” Dr Mardiasmo said.

“Yes, they provides first home buyers with help, but they also increase demand and thus property prices.”

The expected impact accessing super for a house deposit would have on house prices would likely vary around the nation.

“Whether or not the policy would cause a significant jump [in property prices] depends on the market conditions at the time,” she said, highlighting broader economic factors such as the cash rate, along with specific occurrences like a well-stocked market, could lessen the overall impact.

“Back when a lot of first home buyer schemes and grants were introduced, they caused a significant house price jump, mainly because the cash rate was extremely low.

“Now that we have a higher cash rate, it may moderate any price jump.

“However, we are entering a more stable, holding cash rate pattern, which suggests buyers may exhibit higher confidence and more people will likely want to enter the market.”

Help to Buy likely to have negligible impact on house prices

The Albanese Government’s proposed Help to Buy scheme is one of Labor’s answers to the housing crisis.

It promises 10,000 buyers per year an equity contribution of up to 40% for the purchase of a new home and up to 30% for the purchase of an existing home.

Though its legislation mightn’t pass through the Senate due to the fact neither the Coalition nor the Greens support it.

One argument the Greens have against the scheme – that it could drive house prices upwards – appears to be unfounded. 

Grattan Institute estimates suggest it will have “close to zero impact on house prices,” economic policy program director Brendan Coates told a Senate committee inquiry. 

“We estimate that after four years, the 40,000 places on offer could result in overall house prices rising by about 0.0165%, or $113 for a $700,000 home,” he said.

Its impact on the housing crisis is up for debate, with Greens housing and homelessness spokesperson Max Chandler-Mather noting it could help less than 1% of renters buy a home.

Meanwhile, Mr Sukkar notes that similar schemes, like that offered by the NSW Government, aren’t utilised by first home buyers. 

“It's the sort of policy – the so-called Help to Buy scheme – that you come up with when you really don’t want to do anything, but you want to have something on the books,” Mr Sukkar told the ABC.

“It’s not a meaningful homeownership policy.” 

He also shared similar sentiments on the Savings Tip Jar Podcast back in September.

Is dipping into your super for a house deposit a good idea? 

Whether Aussie first home buyers will ever be able to dip into their super to buy a house is yet to be seen.

However, if the super-for-housing policy were to come into play, would it be a good idea for a young person to use their retirement funds to buy a house? 

“Breaking the seal on super leaves people poorer in retirement and costs every Australian taxpayer more from higher age pension costs,” Ms Schubert said.

More nuance is provided by Dr Mardiasmo. 

“The amount ‘lost’ from super will be going towards a house that grows in value over the years, and can be used for equity or can garner a higher resale value, providing a comfortable retirement,” she said.

“But, in terms of what a super is designed to do –  prepare for retirement – it is not so black and white. 

“Many factors need to be considered: The amount currently in super, the projected amount added during the person’s working life, the person’s potential income power, the type of residential stock that will be bought, current economic conditions, individual financial conditions, all this needs to be considered.”

Image by Andre Taissin on Unsplash

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