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ยท Posted on
May 17, 2022

The Libs want you to raid your super to buy a house, so should you rob Peter to pay Paul?

The Federal election is just days away and Scomo is having some big ideas about what people should do with their superannuation.

What's the key learning?

  • There are two main ways to make housing more accessible: reducing demand or increasing supply.
  • This policy does neither, but it could potentially help first home buyers get into the market sooner.

๐Ÿ‘‰ Background: With the Federal election just days away, the major parties are ramping up their campaigns ๐Ÿ—ณ. Over the weekend, the Liberal party made a huge last ditch effort for votes.

๐Ÿ‘‰ What happened: They announced a new policy that would let first home buyers withdraw up to 40% of their superannuation (to a maximum $50k) to buy a house. The Coalition said this would cut down the time it takes to save a house deposit by 3 years.

๐Ÿ‘‰ What else: ย If/when you eventually sell the house, the amount you took from your super needs to go back in, along with a share of any capital gains. But while this may help first home buyers get into the market sooner... it might also drive up property prices.

๐Ÿ”” What's the key learning?

๐Ÿ’ก When it comes to providing better access to the property market, and making housing more affordable, there are two ways to achieve this.

๐Ÿ’ก We've got:

  1. Reduce the demand for properties
  2. Increase the supply of properties.

But this policy isn't really doing either, however it would potentially allow the 100,000 first home buyers out there to enter the market sooner.

๐Ÿ’กBut, Industry Super (which is part of the Labour Party), reckons that this policy could add up to 16% to the cost of a home. So, if the Coalition are elected again, it will be interesting to see how this offer affects property prices across the board.

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