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.
Property
Property hotspots for young Aussies revealed
New research from Westpac revealed that the number of first home buyers looking to enter the market has more than doubled since 2019, proving that COVID-19 continues to shape Australian home ownership...Read more
Property
Aussies swap housemates for home ownership
The number of younger Australians looking to enter the property market in the next five years has doubled, as COVID-19 restrictions sees home ownership goals increase, according to research released ...Read more
Property
Falling loan deferrals prove market recovery: REIA
The reduction in loan deferral defies doom and gloom forecasts in the property market, the Real Estate Industry of Australia has said. ...Read more
Property
Why are expats returning to property market?
Expats are returning to Australia in droves, eager to put their money into safe investments. ...Read more
Property
Stamp duty to be phased out under new proposal
The NSW government has stated that it could phase out inefficient taxes such as stamp duty as it looks to recover from the COVID-19 pandemic. ...Read more
Property
Melbourne rents continue to decline
While most capital cities recorded increases in asking rents, Melbourne continued to see declines in both houses and units, according to latest data from SQM Research. ...Read more
Property
Why investors should focus on the next 1-5 years
Investors are being urged to look beyond their own backyards into opportunities over the next one to five years. ...Read more
Property
Distressed sales fall to pre-pandemic levels
Urgent property sales have dropped back to pre-pandemic levels in most cities – proof of Australia’s continuous recovery from the effects of the COVID-19 outbreak. ...Read more
Property
Property hotspots for young Aussies revealed
New research from Westpac revealed that the number of first home buyers looking to enter the market has more than doubled since 2019, proving that COVID-19 continues to shape Australian home ownership...Read more
Property
Aussies swap housemates for home ownership
The number of younger Australians looking to enter the property market in the next five years has doubled, as COVID-19 restrictions sees home ownership goals increase, according to research released ...Read more
Property
Falling loan deferrals prove market recovery: REIA
The reduction in loan deferral defies doom and gloom forecasts in the property market, the Real Estate Industry of Australia has said. ...Read more
Property
Why are expats returning to property market?
Expats are returning to Australia in droves, eager to put their money into safe investments. ...Read more
Property
Stamp duty to be phased out under new proposal
The NSW government has stated that it could phase out inefficient taxes such as stamp duty as it looks to recover from the COVID-19 pandemic. ...Read more
Property
Melbourne rents continue to decline
While most capital cities recorded increases in asking rents, Melbourne continued to see declines in both houses and units, according to latest data from SQM Research. ...Read more
Property
Why investors should focus on the next 1-5 years
Investors are being urged to look beyond their own backyards into opportunities over the next one to five years. ...Read more
Property
Distressed sales fall to pre-pandemic levels
Urgent property sales have dropped back to pre-pandemic levels in most cities – proof of Australia’s continuous recovery from the effects of the COVID-19 outbreak. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
