Housing industry backs Morrison government’s super withdrawal scheme amid affordability concerns
Prime Minister Scott Morrison said his government, if re-elected, would let first home-buyers withdraw up to 40% of their super.
Housing and property industry associations have welcomed the Coalition’s pledge to allow would-be homeowners draw from their superannuation accounts to enter the property market, even as market onlookers say the policy would worsen the affordability crisis it is meant to relieve.
At the Liberal Party’s official campaign launch on Sunday, Prime Minister Scott Morrison announced his government, if re-elected, would let first home-buyers withdraw up to 40% of their superannuation stash, capped at $50,000, for a deposit.
Participants in the scheme would see the amount they withdrew returned to their super account if they end up selling their home. A “share of any capital gain” would also enter their super balance, the party said.
The plan “makes it easier for first home buyers to save for a deposit, reducing the time people need to pay rent, and also means a smaller mortgage with less debt and smaller repayments,” Morrison said.
The policy arrives after a phenomenal two years in the Australian housing market, where prices have surged to never-before-seen levels, putting ownership even further out of reach for those without significant financial backing.
The scheme has been welcomed by the Housing Industry Association, the peak national body for residential builders.
“Owning your own home is the best form of security for your future retirement,” the organisation said.
“This scheme is a responsible, well thought out plan to ensure that the equity Australians hold in their super can be used effectively to ensure they own their home now and in retirement, and at the same time retain a managed approach to financial security.”
Master Builders Australia national director Ben Carter called the proposal a “step up for all the aspirational people on middle incomes who yearn to own their own home”.
While the policy is ostensibly designed to curb severe affordability issues, critics say boosting the amount homebuyers can pay, without meaningfully changing the quantity or nature of housing supply, will only drive prices up.
At the same time, the policy would reduce the amount of superannuation accrued through a participant’s working life, reducing the funds available to them in retirement.
If material and labour shortages persist, the scheme could also compound industry struggles to find and pay for the right resources and workers.
Speaking to the ABC Monday morning, Minister for Superannuation Jane Hume admitted the policy would “temporarily” grow property prices.
“This policy has rightly been rejected by Governments on a number of occasions because it would only serve to drive up house prices and rip tens of thousands of dollars out of the retirement savings of working people,” said Australian Council of Trade Unions president Michele O’Neil.
Facing Sunrise on Monday morning, Morrison said the policy was “well designed.”
