The government is paving the way for the next property stimulus package.
So we’re getting an early signal about where the next property boom is going to come from.
Actually, it won’t cause it’s own boom… or at least you won’t notice the boom in the middle of the cheap-money boom.
But we can think about it strapping another rocket booster to the housing market.
The scheme I’m talking about is letting first home buyers raid their super to buy property.
The logic is pretty sound. There’s no point having a large super nest-egg if you don’t own your own home and you’ve been renting your whole life.
In many ways, buying your first home has to be your primary financial focus. The road to wealth gets easier after that.
And we know people want to do it, because it was one of the first things people did when they were allowed to raid their super when Covid hit.
So I’m not really seeing what’s standing in the way of this idea. Maybe a bit of whingeing from the super industry.
But I reckon we can almost lock it in.
It’s a proposal being championed by a group of Liberal MPs, led by Tim Wilson, are leading the calls:
Mr Wilson… told The Age and The Sydney Morning Herald that compulsory superannuation had reversed the normal stream of life events and now prioritised saving for retirement ahead of saving for a house.
“Most Australians don’t think it should be a choice between home ownership and super, but the reality is every dollar locked in super can’t be used to buy a home”…
“If Australians buy a home they can start saving for their future retirement, whereas they can’t start saving for a home from retirement”…
Mr Wilson said it was “illogical” that a 40-year-old had $100,000 in superannuation savings but did not own their own home.
“On the same trajectory they’ll get the pension, it’s just whether it will be gobbled up in rent, or used for a dignified retirement while owning a home,” he said.
Former Reserve Bank governor Bernie Fraser agrees:
“In my view … the long-term return of owning a house rather than having to be renting one would outweigh the return of even a good performing super fund,” he said…
“I just think, particularly as house prices are going up and rent prices are going up, the opportunity for some modest-income people to have a house would be a very good investment.”
As does Robert Gottliebsen:
My first recommendation is therefore that an amount of money in superannuation (let’s leave the amount required until later) should be allocated to help buy a first home.
And the Senate cross-bench looks like they’ll support it:
One Nation leader Pauline Hanson, Centre Alliance’s Stirling Griff and independent senator Rex Patrick said on Tuesday they would be open to changes to the super system to help renters enter the property market by accessing their retirement savings early.
A growing number of Coalition MPs are urging cabinet to prioritise home ownership over super savings…
The crossbenchers’ comments indicate the government could have enough support in the Senate to achieve changes to the retirement system…
A spokesman for independent senator Jacqui Lambie said she did not yet have a position. One Nation’s Malcolm Roberts did not respond to a request for comment.
Done deal, I reckon.
And giving first home buyers a bit of help with their depost is obviouysly a plus for property prices, particularly around the entry level segement.
So watch for it. This is just one more star aligning for property in 2021.