If first-home buyers are allowed to use their superannuation to buy their own home, they are likely to end up with bigger 'nest eggs' at retirement than if they rented their whole lives, says Malcolm Gunning, president of the Real Estate Institute of Australia.
He said it is "nonsense" to suggest accessing super to buy a home will erode retirement savings, as both comprise the asset pool at retirement.
Giving young people access to their own money in a superannuation fund to purchase their first home should not be controversial, he said, and is already being used successfully in Canada, New Zealand, and Singapore.
“Accessing Super is not a radical idea," said Gunning.
Gunning said first-home buyers are often able to save part of the deposit for their first home, but are turning to alternative measures, such as taking out personal loans and using credit cards, to get over the line and cover transaction costs.
“Surveys show that not only are aspiring homebuyers saving for longer but are also using debt to meet their deposit requirement," he said.
Gunning said the idea of using some superannuation to help fund the deposit on a property purchase was "practical", and could in fact mean young people have a larger 'nest egg' of assets at the time of their retirement.
“Superannuation and home ownership are both components of a retiree’s ‘nest egg’," he said.
"By buying earlier in life, retirees have every prospect of having a higher equity on retirement and a larger ‘nest egg’ on downsizing.
“It is nonsense to suggest that early access to superannuation for a home deposit would undermine retirement savings," said Gunning.
“Access to superannuation for the purchase of a first home could help reverse the trend of falling home ownership," he said, adding that it addresses "the looming social problem of large numbers of long-term renters aged 45 years and over remaining in the rental sector and possibly requiring rental support in later years."
Gunning said superannuation funds that invested in residential investment property have provided the best returns for their members over the last 20 years. He said individuals should be able to use their super to invest in their own home.
“REIA believes in the benefits of continuing the high ownership level in Australia, particularly as the population ages," said Gunning.
“The Government should be applauded for considering a holistic approach to housing affordability which includes giving access to superannuation for first homebuyers,” he said.
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