Super and first homebuyers causes a stir

Super and first homebuyers causes a stirAn unexpected debate has erupted over whether to allow young people to access their superannuation savings to pay the deposit on their first home. At a Chatswood Chamber of Commerce lunch on Friday, a questioner from the floor thanked the federal Treasurer “for putting the cat amongst the pigeons regarding superannuation being used to facilitate first homebuyers.”In reply, Mr Hockey quipped, “I didn’t put the cat amongst the pigeons. There was a whole litter of kittens out there already.”The general concept is certainly one that has been around for decades, indeed as the Prime Minister noted, it featured in Fightback! as part of the 1993 election campaign.But the debate has been reignited once again by the heat in the housing market, in Sydney particularly, combined with record low interest rates, planning-related supply obstacles and a fairly low market share of first homeowners.First homebuyers currently account for 14.2 per cent of the market, compared to peaks of over 30 per cent in the last decade, which coincided with the provision of government-funded first homebuyer grants.Housing affordability is of growing concern to the community, industry and governments.The Property Council welcomed the Government’s interest in housing affordability, which is a critical issue for Australia.But Chief Executive Ken Morrison said the focus was misplaced and the proposed solution risked exacerbating the problem.”The key problem to focus on in addressing housing affordability is lack of supply – this is by far the biggest driver of increasing house prices,” Morrison said.”Even with the current record-high housing construction levels, we still face undersupplied markets right around the country which is putting upward pressure on prices.”Turbocharging supply is a challenge for governments collectively to tackle by making tax and planning reform a priority.”The Property Council does not support the proposal to allow young people to use superannuation to fund a home deposit as in the current undersupplied market as this will only put more upwards pressure on housing prices.”We encourage all governments to focus on policies that will help bring on supply to meet the historically high demand as the best way to help first homebuyers.”