Study Finds Proposal to Allow First Homebuyers to Use Super for Deposits Will Inflate Property Prices

A new study has found that a key proposal aimed at helping Aussies get into homes sooner could actually end up making real estate more expensive for everyone. The study, conducted by the Super Members Council, revealed that a government proposal to allow first homebuyers to use their superannuation for a home deposit could potentially cause house prices to rise by as much as 13 per cent or $86,100.

According to the modelling, allowing first homebuyers to withdraw $50,000 from their super could result in a major increase in property prices across all capital cities. Sydney could see a median price hike of almost $80,000, Melbourne nearly $70,000, Brisbane $78,000, and Perth a whopping $86,000.

Super Members Council CEO, Misha Schubert, expressed concerns about the potential consequences of this proposal, stating that it would only make housing more expensive across the country and exacerbate the cost of living crisis. She emphasized that using retirement savings for house deposits would lead to a significant price hike, resulting in higher mortgage costs for Australians and making capital cities even less affordable for new home buyers.

While the idea of allowing super withdrawals for home purchases may seem appealing to some, the study warns that it could have long-lasting negative effects on Australians’ retirement savings and ultimately cost taxpayers more in the form of higher age pension costs. With growing concerns about the financial impact of such a proposal, it remains to be seen how policymakers will address the issue and find a balance between helping first homebuyers and maintaining housing affordability for all Australians.