First home buyers to be allowed to raid super to buy house.

M

moyjos

Soon, young people will be able to dip into their super fund to help them buy their first home.
Or at least they will if independent Senator for South Australia Nick Xenophon gets his way. He plans on introducing legislative changes to the Spring session of Parliament that would allow first home buyers to raid their super to pay for a house

http://barefootinvestor.com/simple-plan-buy-house/


Interesting plan....could make for some interesting times
 
This will only put upward pressure on prices. No guarantee that it won't be a bad investment. Super is best left in an inaccessible account where the uneducated can't get their hands on it.
 
Personally I would have loved to raid my super to plow into my property (even now). The whole point of super is to plan for the future...well, my home IS my future (unless I decide to become a mountain man and live in a tent).

Although, I personally know a lot of people who would spend their super to buy a house, then sell the place to go run around the world for a few years. And come back broke, with no super.

Also, does it seem like every government's solution to the housing crisis is just a band-aid solution, rather than realistic long-term plans?
 
Last edited:
It's the dumbest idea ever

1) Young people arent likely to have any/much super
2) It worsens the 'affordability problem' they're trying to fix
3) Encourages more consumer spending and lack of responsibility since they can go oh well, will get a house with super next year anyways
 
I was actually thinking about this whilst out strolling around today. Thought it might have a semblance of working if all of the following conditions were met:

- the total value of the mortgage must not exceed 30% of gross salary (to stop people from trying to buy crazy expensive homes they can't afford)
- concessional contributions must be made into super up to the maximum allowable until such time as the mortgage has been paid out in full
- concessional contributions must continue to be paid to the maximum until such time as the funds (both contributions and calculated returns, based on say, the 'Balanced' profile of the super trustee) have been replaced
- must continue to make minimum concessional contributions of 5% on top of SG to retirement.

Hey Xenophon, high five me, bro!
 
It's not a bad idea, Switzerland does this.
It should be done however with some other reforms like mandatory 20% deposits and elimination of negative gearing to reduce speculative pressure on prices.
 
Nick X is one of the biggest idiots in politics (not bigger than Sarah Seapatrol). Only says things to stir pot of trendy opinion in fields he doesn't belong in.
 
It is interesting how journalism works.
First he says, "Soon, young people will be able to dip into their super fund to help them buy their first home."

Then, "Or at least they will if independent Senator for South Australia Nick Xenophon gets his way.

Finally, "Okay, so how likely is it to actually happen?

Normally, it?d be close to zero"
 
Clickbait, Devan. That's the way most news sites/blogs operate these days. The more clicks they get, the higher they can charge for advertising.
 
in my current situation, i would love to be able to either 1. acces some super for part of deposit/legals, or 2. avoid LMI by Guarantor'ing my own loan with a portion of super.
i would have 50-60k by now.
 
Angel said:
I've never yet read anything intelligent from the Barefoot Investor.
Click to expand...

To his credit, he actually says he's against it at the end of the article, but the heading and most of the content suggests the opposite. As suggested, it's clickbait.

Super exists because people aren't disciplined enough to save for their retirement. The biggest barrier to home ownership is the inability to save for a deposit. Perhaps a better option would be to force people who don't own property to contribute 19% to super and then they could use half of it as a deposit?

Realistically though, super is there to provide for retirement. It's a long term strategy. Super doesn't look much to young people, but over a lifetime (assuming the fund managers don't mess it up) it can amount to a substantial amount. Using peoples super in the early years will destroy this potential.

It's also widely acknowledged that the first home buyers grant has been a significant driver in housing unaffordability to the very people it was meant to help. Allowing people to access their super does nothing to change this.
 
People who have enough deposit to buy their home through their super would surely have already have purchased their first home already?

A $300k property with a 40% deposit in their super means that person would have earned $1.3m in gross earnings. I doubt anybody who has earned that much would not already purchased their first home.
 
Peter_Tersteeg said:
Super exists because people aren't disciplined enough to save for their retirement
Click to expand...

I agree that most people aren't disciplined enough to save for their retirement - but imo it is not the reason why super (as we know it) came into effect.

The government simply wanted to (mostly) dodge the large, slow moving but inevitable financial bomb that was the retirement of the baby boomers (and the strain on social security that would have caused).

Peter_Tersteeg said:
Perhaps a better option would be to force people who don't own property to contribute 19% to super and then they could use half of it as a deposit?
Click to expand...

Force?

Maybe make it an option.

But I think we need to respect the rights of the individual to not want to buy property (and did you mean PPOR, or "property", btw?).


Peter_Tersteeg said:
It's also widely acknowledged that the first home buyers grant has been a significant driver in housing unaffordability to the very people it was meant to help. Allowing people to access their super does nothing to change this.
Click to expand...

Demand side measures are always destined to fail or at least "be less successful than was the original intention".

Though I will add that in NZ, subject to certain criteria (income, etc) FHB's can access a portion of their kiwisaver (like super) if they have been a member for a minimum of 3 years (KS is not compulsory). They can also apply to a government department for an additional $3 to $5k ($10k for a couple) as a one-off bit of assistance. NZ doesn't have stamp duty - so essentially these funds can be put towards the purchase cost. There are limitations on the value of the property you can buy - not sure what it is atm, but it used to be $400k in Auckland and Queenstown, and $300k for the rest of NZ.

I've not heard of it over-heating the market tbh.
 
In my opinion, this idea, good or not, will never ever ever happen. Why? Because the major political parties are owned by the banks and they (the banks) will see Australia fall into the ocean before they agree to allow such a thing to happen.

Imagine how much money they'd lose if this were to become an option for the punters!
 
You must log in or register to reply here.

Similar threads

Spades
Should first home buyers access their super for a new home?
Replies
6
Views
1K
neK
N
meriam_salama
First Home Buyers
Replies
0
Views
897
meriam_salama
meriam_salama
T
Australia is in one of the worst housing bubbles we have ever seen - Lindsay David
Replies
0
Views
620
two40
T
B
First home buyer - any chance?
2
Replies
22
Views
4K
westminster
westminster
P
First Home Buyer - Where to buy in South, SouthWest of Brisbane
Replies
2
Views
1K
Investor78
I
Back
Top