A Coalition policy to raid super for house deposits – reaffirmed in tonight’s Budget-in-Reply speech - would just pour more fuel on the fire of Australia’s housing affordability crisis, hiking house prices by up to 10% and pushing the dream of homeownership even further out of reach for everyday Australians.
Responding to tonight’s Budget-in-Reply speech reaffirmation by Opposition Leader Peter Dutton, the Super Members Council (SMC) urged the Coalition to dump its super for a house policy.
Withdrawing super for house deposits has been discredited by a long list of respected economists.
Detailed analysis of evidence from New Zealand found after it introduced a super for house scheme, house prices took off – growing at twice the rate of those in Australia up to the market peak (in 2022) – and home ownership rates fell by 7 percentage points for Kiwis in their 30s, a key first home buyer demographic.
A study by leading housing economist University of South Australia Professor Chris Leishman, commissioned by SMC, found the Coalition policy allowing first home buyers to withdraw super for house deposits could see house prices hike by up to 10.3%.
Pouring retirement savings into house deposits would supercharge an already-inflated property market – raising capital city median prices by up to $92,500 and adding $260 a fortnight to a homebuyer’s mortgage.
SMC CEO Misha Schubert said a vast body of expert evidence was crystal clear that early withdrawals of super for house deposits would just push up house prices further and faster – pricing more Australians out of owning their own home.
“Raiding retirement savings for house deposits would just unleash a supercharged price hike in house prices, not create more new home buyers,” Ms Schubert said.
“That would mean home buyers in future would have to pay higher repayments on bigger mortgages for longer, worsening housing affordability and cost-of-living pressures on younger Australians.”
“The international literature is clear, the lived experience in New Zealand is clear, and detailed and rigorous econometric models are clear – taking super out for house deposits will just further drive-up house prices, fuel higher mortgages and debt stress in a cost-of-living crisis and push the Great Australian Dream of home ownership even further out of reach for many young Australians.”
“And if people retire with less super, that will also push up age pension costs - a bill that every Australian taxpayer would pay.”
SMC analysis shows a 30-year-old who withdrew $35,000 from their super today could retire with about $195,000 less in today’s dollars.
Australia’s leading economists say the housing supply and affordability crisis needs to be tackled with other policies – in a recent Economic Society of Australia survey, only 1 out of 49 top economists supported withdrawals of super for housing.
In a comprehensive report in 2024, respected independent economist Saul Eslake showed policies that allow Australians to pay more for housing just result in more expensive homes rather than a higher proportion of people owning housing.
Table 1: Estimated upper-bound price impacts from allowing first home buyers to access super for a house
|
Capital city |
Median |
Supercharged price hike |
Median after |
Additional mortgaged repayments |
|
|
Fortnight |
Life of loan |
||||
|
Sydney |
$1,193,200 |
$122,900 |
$1,316,100 |
$345 |
$269,400 |
|
Melbourne |
$772,300 |
$79,500 |
$851,800 |
$223 |
$174,300 |
|
Brisbane |
$893,600 |
$92,000 |
$985,600 |
$259 |
$201,700 |
|
Adelaide |
$819,400 |
$84,400 |
$903,800 |
$237 |
$185,000 |
|
Perth |
$809,900 |
$83,400 |
$893,300 |
$234 |
$182,800 |
|
Hobart |
$658,200 |
$67,800 |
$726,000 |
$191 |
$148,600 |
|
Darwin |
$502,600 |
$51,800 |
$554,400 |
$146 |
$113,600 |
|
Canberra |
$850,500 |
$87,600 |
$938,100 |
$246 |
$192,000 |
|
Combined capitals |
$897,600 |
$92,500 |
$990,100 |
$260 |
$202,800 |
Notes: Professor Leishman found that the policy would increase house prices by between 7.4% and 10.3%. The above estimates are based on the upper bound of 10.3%. Median house prices for each capital city are sourced from the CoreLogic Hedonic Home Value Index for January 2025, with prices rounded to the nearest hundred dollars. Property prices include both houses and units. Mortgage repayments are calculated using average lending rates for new owner-occupier, principal-and-interest loans as sourced from the RBA, and assume a 30-year loan term, and holding the deposit amount constant.
Source: SMC analysis; Leishman C., 2025, The housing market effects of borrowing from superannuation; CoreLogic Hedonic Home Value Index as at 31 January 2025; RBA Lenders’ Interest Rates for January 2025.
Ends
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We’re a strong voice advocating for more than 11 million Australians who have over $1.5 trillion in retirement savings managed by profit-to-member super funds. Our purpose is to protect and advance the interests of super fund members throughout their lives, advocating on their behalf to ensure super policy is stable, effective, and equitable. We produce rigorous research and analysis and work with Parliamentarians and policy makers across the full breadth of Parliament.
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