Australia does not have a housing affordability crisis, it has a housing equality crisis and little is being done by either major party to address the widening gap according to some industry heavyweights.
Housing affordability remains a hot topic in the lead up to the federal election with both major parties committing to tackling the issue, but neither has a plan to address the shortfall in supply of housing.
In a bid for re-election this weekend the LNP has announced a Super Home Buyer Scheme, which would enable first homebuyers to withdraw up to $50,000 from their superannuation to put towards a house deposit.
It follows the lowering of age thresholds to 55 for lump sum payments into superannuation accounts after the sale of a property, aimed at incentivising downsizing and unlocking the property market.
The Labor Party announced a 40 per cent shared equity scheme earlier this month, where the government would own a proportion of the property up to $380,000, limited by income caps of $112,000 per household.
While the LNP’s two-pronged approach has been welcomed by the industry, a superannuation body has slammed the move.
Australian Institute of Superannuation Trustees chief executive Eva Scheerlinck said raiding superannuation would inflate house prices and do nothing to address housing affordability.
“Accessing your super early won't get you closer to your dream home or fix Australia's housing crisis. Using super as a deposit will drive up property prices, leaving Australians with higher debt and depleted retirement savings,” Scheerlinck said.
“First home buyers are being asked to choose between a home and saving for their retirement, they should be able to have both.
“The Australian government must address this modern-day inequity by addressing supply issues rather than raiding super. A first home should not come at the expense of dignity in retirement.”
Corelogic head of research Eliza Owen said the scheme would favour affluent young people and deepen the housing equality problem.
“The actual value that could be accessed through this scheme is relatively low for the typical young first homebuyer … they are typically younger, and the median super balance was just $25,000 for those aged between 25 and 34 years of age,” Owen said.
“At 40 per cent, the scheme would offer just $10,000 at the median level, or the equivalent of some state-based first homeowner grants … the scheme could help increase the size of a standard deposit by around 1 per cent.”
Owen said the take-up rate in first home buyers could be lower with the pull forward effect of the Homebuilder, lower interest rates and other stimulus measures.
She said the downsizing incentive would theoretically release more established housing supply for younger families, and lowering the age threshold would qualify about 1.3 million households nationally for the scheme.
But the lump sum superannuation deposit had only been used by about 22,000 households in the three years to May 2021.
Utilising superannuation as security for a home loan was one of the key recommendations in the Inquiry into housing affordability and supply, which was released earlier this year.
HIA managing director Graham Wolfe said he welcomed the Super Home Buyer Scheme, and it was an initiative the HIA had been lobbying for.
“Access to finance for a deposit is the biggest obstacle for Australians trying to buy their first home, especially those paying rent while saving for their deposit,” Wolfe said.
“When the house is sold they can put the money back into their retirement fund with a proportion of the capital growth in value of their home … they are effectively borrowing from themselves.”
Property Council chief executive Ken Morrison said the downsizing incentive was welcome news but said more needed to be done to address housing supply.
“The Super Home Buyer Scheme is another demand-side measure supporting the worthy goal of home ownership, but the primary challenge is to provide the housing supply and choice our growing communities need,” he said.
“Falling supply and growing demand is a dangerous position for housing affordability.
“While targeted demand-side policies to support aspiring homebuyers are welcome, a supply crunch is coming and this needs be the focus for whoever wins government next Saturday.”
The Australian Institute of Architects national president Tony Giannone has called on the major parties to appoint a federal Minister for Housing and create a 30-year National Housing Strategy.
“Adequate housing should be a right in a country as lucky as Australia, but it’s not,” he said.
“We need a national, centralised system to monitor housing supply and establish targets for social and affordable housing for those who need it.
“Social housing and affordable housing initiatives need to be delivered for the long term, not for the next election.”
BuyersBuyers chief executive Doron Peleg said there was a “chronic undersupply of family-appropriate housing” near to employment hubs.
“The supply side of the market remains a major challenge with a lack of coordinated approach between federal, state and local governments,” Peleg said.
“This systematic failure is highly likely to continue in the near future. As long as that’s the situation, property prices in land-locked suburbs where demand is concentrated are likely to increase at a rate that is above inflation.”
