What first home buyers think of raiding their super to buy a home

First home buyers are divided over a new policy that would enable them to use their superannuation funds to purchase a home.

Prime Minister Scott Morrison announced on Sunday that first home buyers would be able to withdraw up to 40 per cent of their super funds, up to a maximum of $50,000, for a home deposit if the Coalition wins the election. Industry figures welcomed the announcement, with Housing Industry Association managing director Graham Wolfe saying that access to finance for a deposit was the biggest obstacle for Australians trying to buy their first home. However, Property Council chief executive Ken Morrison described the Super Home Buyer Scheme as another demand-side measure and urged the government to tackle housing supply to properly address growing affordability concerns.

The Financial Services Council, which represents retail super funds, warned the move would undermine retirement savings, while some economists and housing experts said it could further fuel buyer demand and put upward pressure on property prices. But what do first home buyers and renters think of the proposal?

Aspiring Sydney home owner Yatha Jain said the policy was not helpful to her as it would drive up property prices and leave her poorer in retirement. “Firstly, it doesn’t really address the issue of affordable housing because it will make prices increase, and secondly, the impact on my super, as a young person, as a woman, as a woman of colour, we traditionally have less super when we retire – it will perpetuate that cycle,” the 25-year-old said.

The graduate, who works in the medical device industry and rents in Newtown, said she would rather the federal government commit to increasing supply instead. “It’s not making it more affordable. You don’t make things more affordable by increasing the prices and giving out a little bit of money … and even when I say ‘giving out money’, they’re not really giving out money – they’re giving us the option of borrowing from our future. “I’d like to see more supply of affordable houses. I’m no economist, but if you increase supply, prices go down. It’s very telling of the government and where they stand and who they are helping out.”

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*By Kate Burke & Tawar Razaghi (The Sydney Morning Herald May 2022)