Invest
Super funds could use bargaining power for cheaper mortgages
The First Home Super Saver Scheme won’t address housing affordability, but funds could instead use their “bargaining power” to pursue cheaper mortgages, the CEO of Rice Warner has said.
Super funds could use bargaining power for cheaper mortgages
The First Home Super Saver Scheme won’t address housing affordability, but funds could instead use their “bargaining power” to pursue cheaper mortgages, the CEO of Rice Warner has said.
Arguing that the adequacy of Australia’s retirement income system is still not strong enough, Michael Rice questioned the value of allowing first-home buyers to divert money out of their super to put into a deposit.
“There's a real range of those people may start owning a home but their super balance is going to be low,” Mr Rice said.
“I think it's a good discipline for people to have to learn to save money themselves; the super saver is forced on them.”
He noted the relatively small $30,000 cap on money that can be diverted out of super for a first home and said he believes it would be “easier for super funds to use their bargaining power to get cheaper mortgages to people”.
The family home and the age pension assets test
Continuing, Mr Rice told attendees at the Actuaries Institute’s Financial Services Forum the age pension assets test should include the family home.
“We should recognise that a family home is an investment. Years and years ago, in the ‘70s, the average house price was 2.5 times average earnings. So it was affordable, people could get it with two incomes,” he said.
“Now, where it's 10-12 times the average income, a big part of [older Australians’ reluctance to downsize] is part of their investment portfolio and you'll need to change the age pension assets test to get people to move.”
In a paper he presented to the forum, Mr Rice said including the family home in the means test at a fixed value of average earnings, while adding a multiple of six times average earnings to the asset test thresholds would “shift the pension to becoming a safety net”.
“Currently, the exclusion of the family home from the assets test creates distortions in savings patters and favours home owners over renters. In addition, it discourages downsizing, as the proceeds of downsizing would become subject to means testing,” he said.
Mr Rice suggested any changes to the means test’s treatment of the family home be introduced over a 10-year period to allow people time to adjust.
RELATED ARTICLES
Property
Rents are rewriting the inflation playbook: what record‑low vacancies mean for Australian business
Australia’s rental market is so tight that housing costs are now a primary transmission channel for inflation and interest rates. This isn’t just a property story; it’s a business risk story—affecting ...Read more
Property
Off-market real estate is going mainstream — and changing the rules of dealmaking
With public listings tight and sales still climbing, Australia’s investors are shifting to off-market channels that reward speed, networks and data advantage. The playbook is closer to private equity ...Read more
Property
Australia’s rental squeeze is now a business problem: inflation, capacity and the new growth calculus
Record-low rental vacancies are no longer just a social headline – they’re reshaping cost structures, wage dynamics and capital allocation across corporate Australia. With economists warning of a ...Read more
Property
Rents Are Repricing Australia Inc: What record‑low vacancies mean for inflation, talent and strategy
Australia’s rental market has slipped into a vacancy desert, and it’s not just tenants feeling the heat. Persistently tight supply is pushing up rents, embedding services inflation and complicating ...Read more
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
Property
Rents are rewriting the inflation playbook: what record‑low vacancies mean for Australian business
Australia’s rental market is so tight that housing costs are now a primary transmission channel for inflation and interest rates. This isn’t just a property story; it’s a business risk story—affecting ...Read more
Property
Off-market real estate is going mainstream — and changing the rules of dealmaking
With public listings tight and sales still climbing, Australia’s investors are shifting to off-market channels that reward speed, networks and data advantage. The playbook is closer to private equity ...Read more
Property
Australia’s rental squeeze is now a business problem: inflation, capacity and the new growth calculus
Record-low rental vacancies are no longer just a social headline – they’re reshaping cost structures, wage dynamics and capital allocation across corporate Australia. With economists warning of a ...Read more
Property
Rents Are Repricing Australia Inc: What record‑low vacancies mean for inflation, talent and strategy
Australia’s rental market has slipped into a vacancy desert, and it’s not just tenants feeling the heat. Persistently tight supply is pushing up rents, embedding services inflation and complicating ...Read more
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
