Govt announces plan for first-home buyers to access super

The Coalition has announced plans to allow first-home buyers to use superannuation to purchase a property, a move criticised by the industry.

Speaking in Brisbane, Prime Minister Scott Morrison announced the Super Home Buyer scheme would let first home buyers use up to $50,000 of their super towards buying a home.

The scheme would begin on 1 July, 2023, if Morrison was successful in the election, and buyers needed to have saved 5% of their deposit separately and live in the home for 12 months.

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However, industry experts said it would undermine the whole purpose of using superannuation to save for retirement.

Blake Briggs, chief executive of the Financial Services Council, said: “The FSC is concerned the Government’s proposal weakens the sole purpose of superannuation, which is to provide higher standards of living in retirement.

“The FSC recognises there is a correlation between renting in retirement and poverty amongst older Australians, but Australians should not have to choose between a home and their retirement savings.

“The Government has an obligation to do more to boost supply, otherwise unleashing superannuation savings on the housing market risks driving prices higher still.”

Glen McCrea, deputy chief executive at the Association of Superannuation Funds Australia (ASFA), said: “The early release of superannuation for housing is not a panacea, is not in line with the objectives of the system and will have long-term consequences for retirement incomes”.

He said ASFA research from 2021 had found early release of super for housing was inconsistent with the central principles of super and would be ineffective in improving housing affordability and increasing home ownership and would lead to higher house prices.

The Australian Institute of Superannuation Trustees (AIST) said it was “very concerned” about the proposal.

“Accessing super early won't get first home buyers closer to their dream home or fix Australia's housing crisis. Using super as a deposit will drive up property prices, leaving Australians with higher debt and depleted retirement savings.

“First home buyers are being asked to choose between a home and saving for their retirement, they should be able to have both. The Australian Government must address this modern-day inequity by addressing supply issues rather than raiding super. A first home should not come at the expense of dignity in retirement.

“Superannuation was established to provide support for Australians in retirement and it is not a piggy-bank the Government can open at its convenience to avoid dealing with the real systemic issues facing first home buyers.”




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As an adviser, I think it is a great initiative when combined with downsizer for 55+. It is about wealth creation and accumulation. If they don't have to save/borrow as much to purchase an appreciating asset, rather than rent, it can only be a good thing. Super Fund platforms believe clients money belongs to them.

All the usual self interested naysayers to losing FUM.
This likely won’t ever happen however a retirement plan involves a roof over your head and an income stream. The two can’t be separated. Plus it is not the govts job to provide either.
The real problem in property is controlled by the states, not the feds. Stamp duty and land tax reform will help with property liquidity

Renting a home to live in after I retire with a lot of my savings in superannuation is not what I want. Having the flexibility to withdraw some of my savings in superannuation to buy a home before I retire will be ideal.

The start for affordable home ownership has been botched by governments of both persuasions ever since the Rudd era. Making it easier to borrow with lower required home deposits has only exacerbated the price of in real estate.
None of these governments seem to realise that increasing the demand by lowering required deposits for real estate with lower supply can only do one thing to the real estate market.

The answer should be reasonably simple.
A return to the old system where buyers needed at least 20.0% deposit not 5.0% or 0.0% in order to borrow is the starting point and monthly repayments shouldn't exceed 25.0% of someones gross income.
That reduces the number of players initially in a market dominated by supply scarcity and then allows those able to save, a reasonable chance to buy if real estate values only rise by the level of acceptable inflation rates (2%-3% annually)

FSC and industry response is laughable."The FSC recognises there is a correlation between renting in retirement and poverty amongst older Australians, but Australians should not have to choose between a home and their retirement savings." What about the logic of allowing them to choose and live with their own decision??????

Jane Hume has now come out against the policy, solid team player - she has confirmed her candidacy for big super next election.

Did Jane Hume suddenly grow a brain?

Interesting that we're being told Advice fees for actual good advice when taken out of super "could" be a breach of the SiS Act but we're motivated enough to bring this policy in. I think if that's the case this is more of a political stunt rather than good intentions.

There is a generation being told on Tik Tok and Insta to buy now and pay later...the trending reels are it's "better to live a short life enjoying today than live a long life with regrets" ...sadly I've seen too many crying retirees (you know the ones that yell at Prime Ministers at the pub saying they're battlers on their age pension) to subscribe to that philosophy.

Hoses should have a $500,000 cap. Not sure of economics of this but would make sense. The highest a house could go is 500K, then everyone could afford a house. The govt. would be the only lender. Sounds communist i spose but food for thought>

Clearly the Liberal Party has not taken advice from Warren Buffett about compounding returns. This is the Party's bandaid solution (lets call it policy vacuum) to do something about escalating residential property prices. No thought of addressing cause of the very generous tax breaks for high end property investors.

The financial investment profession should be up in arms about this idiot policy announcement as after all some FUM will be locked away in property giving no returns to financial advisors except for the very few who have managed to service high wealth clients.

Taking money out of Industry Super to invest in "Unlisted Property" - what is the problem Hedware?

Grasshopper - at last you have worked out that residential property is not listed on the stockmarket and so counts as unlisted assets. Keep up the study. Give attention to the benefit of compound returns, and the supply and demand cycles in the property sector.

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