The government’s proposal to allow first home buyers to plunge into retirement savings for a home deposit has provoked mixed reactions in the affected areas: pension funds have criticized the initiative and builders have welcomed it.
In an election campaign that has been actively fighting against rising living costs, Prime Minister Scott Morrison unveiled a scheme of a super-buyer of housing last weekend ahead of the May 21 vote.
The plan will allow Australians to access 40 per cent of their super, up to a maximum of $ 50,000, for a deposit on their first home.
Eva Sherlink, executive director of the Australian Institute of Pensioners, the strongest body for the $ 1.6 trillion member-owned pension sector, called it an “ignorant and unfocused measure” that would lead to higher house prices.
She said it would reduce the diversification of assets in pension accounts.
“The first buyers of housing are asked to choose between home and retirement, they must have both,” – said Ms. Sherlink.
“The Australian government needs to address this current inequality by addressing supply issues, not raids on the super. The first home should not come at the expense of retirement dignity.”
The Association of Pension Funds of Australia drew attention to a report it published on this issue in March 2021, which argued that the early release of retirees for housing deposits will lead to higher housing prices, making home ownership even more inaccessible to low-income people . .
Proponents of the scheme say it maintains the integrity of the pension savings system, given that when selling property, the amount contributed from the super will be returned to the fund along with a share of any capital gains.
“The success of this policy is that it is aligned with the intention of a pension that should provide sufficient retirement income,” said Master Builders Australia CEO Denita Won, who represents the country’s construction industry.
“People who own their homes, especially in retirement, are much more financially secure than those who don’t. They enjoy a higher standard of living.”
Eliza Owens, head of research at CoreLogic Australia, a leading provider of Australian real estate data, struck a moderate tone in her analysis of the Liberals ’proposal.
She wrote that, given the importance of housing as a factor in reducing the cost of housing, greater financial independence and a higher standard of living in retirement, the plan “has certain advantages when considering housing as an investment in the future.”
But she agreed that the program could boost the cost of housing, which would be good for sellers, but blurs the benefits of the scheme for first-time home buyers.