Housing and real estate industry associations have hailed the Coalition’s commitment to allowing would-be homeowners to dip into their retirement accounts to enter the property market, even though market onlookers say the policy would worsen the accessibility crisis it is supposed to alleviate.
During the official Liberal Party campaign launch on Sunday, Prime Minister Scott Morrison announced that his government, if re-elected, would allow first-time home buyers to withdraw up to 40% of their pension reserve, capped at $50,000, against deposit.
Program participants would see the amount they withdrew returned to their super account if they end up selling their home. A “share of any capital gains” would also go into their super balance, the party said.
The plan “makes it easier for first-time 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 comes after two phenomenal years in the Australian property market, where prices have soared to levels never seen before, putting property even further out of reach for those without significant financial backing.
The program has been well received by the Housing Industry Association, the leading national body for home builders.
“Owning your own home is the best form of security for your future retirement,” the organization said.
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“This program is a responsible and well-thought-out plan to ensure that the equity Australians hold in their super can be used effectively to ensure they own their homes now and in retirement, while maintaining a managed financial security.”
Master Builders Australia national director Ben Carter called the proposal “a step forward for all ambitious middle-income people who aspire to own their own home”.
Although the policy is ostensibly designed to reduce serious affordability problems, critics say that increasing the amount homebuyers can pay, without significantly changing the amount or nature of the housing supply, will only drive up prices.
At the same time, the policy would reduce the amount of retirement pension accrued over a participant’s working life, thereby reducing the funds available to them in retirement.
If material and labor shortages persist, the program could also make it harder for industry to find and pay the right resources and workers.
Addressing the ABC On Monday morning, Superannuation Minister Jane Hume admitted the policy would “temporarily” boost house prices.
“This policy has been rightly rejected by governments time and time again because it would only serve to drive up house prices and squeeze tens of thousands of dollars out of workers’ retirement savings,” he said. said the President of the Australian Council of Trade Unions, Michele O. ‘Neil.
Focused towards Sunrise Monday morning, Morrison said the policy was “well-crafted.”