What Labor says
Aussies will be able to buy a home with a deposit of just 2% as part of Labor’s equity scheme, which will cut the cost of buying a home by up to 40% for 10,000 people a year.
Labor will also make properties cheaper by building social and affordable housing using a $10 billion fund to construct 30,000 homes for families doing it tough, as well as those fleeing domestic violence, and frontline workers like police, nurses and cleaners.
What the Coalition says
First home buyers will be able to invest up to 40% of their superannuation (to a maximum of $50,000) to help with purchasing a property under the Coalition’s new Super Home Buyer Scheme.
It will also lower the age that Aussies can downsize their properties (and invest up to $300,000 into their super fund from the proceeds) to 55 years old.
An extra 25,000 first home buyers will be able to access the Coalition’s popular Home Guarantee Scheme that allows people to buy with a deposit of as little as 5%.
Extra places will also be set aside for regional home buyers and single parents.
What an independent financial expert says about the Coalition’s Super plan
While residential housing is a necessity and should really just be somewhere to live, in Australia it has become an investment class over the past few decades. Aided by loose lending, tax breaks, short term opportunistic pollies trying to get elected and falling interest rates over the past 12 years, affordability has never been worse.
So is the policy to allow 1st home buyers the opportunity to raid their retirement savings a good solution?
The short answer is no. There are two sides to consider – supply and demand. If you increase demand (allowing $50k to be withdrawn for a deposit), then prices will simply increase by $50k. And you have sabotaged your retirement after 60. Most economists would agree. Perhaps they’re just trying to pick up a few young votes who think it sounds like a good idea?
The other crazy thing is that as part of this ‘plan’, they are suggesting that ‘oldies’ sell their homes and downsize so they can put more into super. Ironic, isn’t it! They can sell their home so they can top up their tax free super and so their kids can raid their retirement to buy an overpriced one.