A McKell Institute report released in December used modelling to project the effect on the housing market if Australians were granted access to use super on a home deposit.
Mortgaging our Future, in collaboration with researchers from the Centre for Housing, Urban and Regional Planning at the University of South Australia, found allowing prospective buyers to access $40,000 of superannuation would push up house prices and increase housing debt.
The Coalition proposal would allow Australians to release up to $50,000.
The report found the median house price in Sydney would increase by more than $40,000, while in Brisbane the price would increase by almost $100,000.
An additional $25 billion of debt would be incurred by Melbourne households while debt in Sydney would increase by $23 billion.
The report also found Australians who chose to invest in a house deposit instead of keeping super money would retire worse off, because the average returns in a super fund are better than the average growth in house prices in a long term period.
McKell Institute executive director Michael Buckland said the announcement was “policy madness”:
Homes are already unaffordable for millions of Australians and Scott Morrison’s proposal would pour fuel on the fire.
What first home buyers desperately need is a little calm in the overheated housing market. This proposal would kick start yet another house price spiral, stripping young people of their super savings and doing virtually nothing to improve real affordability.
Super-for-housing would basically mean first-home buyers handing their hard-earned retirement savings to existing property owners, when they would be much better off investing that money in super.
Young Australians need their retirement savings quarantined and compounding.