We’ve heard recent reports of a certain politician suggesting buyers simply ‘earn more money’ if they want to get on the property ladder, however a housing affordability strategy targeting first time buyers is gaining some traction with MPs, offering a more viable potential solution.
A proposal to allow young people to access some of their superannuation savings if they make voluntary payments is being pushed within the Coalition, with the Federal Treasurer Scott Morrison developing a much-needed housing affordability strategy set to be announced in the May Federal Budget. Under the plan, first time buyers would be able to access their employer superannuation contributions equal to their voluntary top-up payments, which could then be used as a deposit on a first home.
With housing affordability remaining one of the government’s most pressing issues, there is much ongoing debate about the best way to address the problem. Some senior government figures are understood to be cautious about the proposal, arguing that boosting home deposits could add inflationary pressure to an already heated market. Many industry pundits have also been voicing their concern about the plan.
Additionally, some MPs are encouraging Mr Morrison to allow older Australians to downsize their homes without it affecting the pension asset test, this in the hope that the ‘downsizers’ large family homes will become available in larger numbers to buyers and likely this increased volume on the market will slow price growth. This also being pushed by the industry’s peak lobby group, the Property Council.
With 10 weeks to go until the Budget, it remains to be seen what the Coalition will deliver in relation to the particularly hot topic.
Of course the real balancing act the Budget and RBA have to master is the quite massive variation in local economic conditions between states and territories and regions within each. To promote the same limits on buyers in Sydney & Melbourne and then drought-hit rural towns and mining-starved cities and towns would prove disastrous to those fraught economies.