Retirement
Using super to buy property will worsen housing affordability, says ASFA
Retirement
Using super to buy property will worsen housing affordability, says ASFA
Allowing individuals to buy property through their super would put significant upward pressure on house prices and exacerbate housing affordability concerns for low-income earners, according to the Association of Superannuation Funds of Australia.
Using super to buy property will worsen housing affordability, says ASFA
Allowing individuals to buy property through their super would put significant upward pressure on house prices and exacerbate housing affordability concerns for low-income earners, according to the Association of Superannuation Funds of Australia.
A new ASFA analysis found that using superannuation for housing deposits would be inequitable and ineffective since it would most likely be used by higher-income earners who can afford a home already
Further, it noted that the direct effect on the housing market is that increased purchasing power would be near fully capitalised into higher house prices, exacerbating the upswing of the current house price-credit cycle.
As a result, ASFA recommended that the government commission a comprehensive and independent review of housing affordability, similar in nature to the Retirement Income Review, to establish a fact base and drive sensible, consistent policy across federal, state and local governments.
ASFA chief executive Dr Martin Fahy said using super 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,” Dr Fahy said.
“Superannuation has been a key source of funding for increasing the supply of affordable housing. Patient, long-term superannuation capital has the capacity to generate increases in housing supply and improve tenure and affordability in the rental market.”
Dr Fahy also said Australia already has some of the most expensive housing in the world.
“With the prevailing macro-economic 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,” he 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.”
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