Using superannuation for housing will place greater upward pressure on house prices and worsen housing affordability for low-income earners, the latest analysis from the Association of Superannuation Funds of Australia (ASFA) has revealed.
According to a recent ASFA policy and research paper on housing affordability and superannuation, allowing the early release of super for housing deposits would lead to higher house prices and worsen the current house price-credit cycle.
In addition, using superannuation for housing deposits would be “inequitable and ineffective” and ultimately favour higher-income earners who can already afford a home, the association noted.
“Australia already has some of the most expensive housing in the world. With the prevailing macroeconomic conditions and surging demand for housing, using super for housing deposits would be disastrous and push prices even further out of reach of first-time buyers,” ASFA chief executive Martin Fahy said.
“Superannuation isn’t the reason young Australians can’t afford to buy a home of their own.
“A lack of supply and the policy settings with respect to residential investment property has had a distortionary effect on demand. These are the real issues that must be tackled to generate improvements in housing affordability.”
The superannuation industry peak body also called on the federal government to commission an independent review of housing affordability in a similar vein to the Retirement Income Review in order to ensure consistent policy across federal, state and local governments.
“Using superannuation for housing deposits is fundamentally inconsistent with the objective of superannuation to provide an adequate retirement income. None of the comprehensive reviews of superannuation over the last decade have recommended it, while several have made recommendations to the contrary,” Fahy added.
In December, Challenger retirement income chair Jeremy Cooper said allowing access to superannuation to assist first-home buyers into the property market would only drive up house prices and would be a poor public policy solution to the issue of housing affordability.
