Tuesday 17 May 2022 12:16 AM Waleed Aly shut down by economist after making point about Scott Morrison's ... trends now
Scott Morrison's plan to let Australians put $50,000 of their super into buying their first home could help the young get into the market much sooner as prices surge.
Australian property prices last year soared at the fastest annual pace since 1989 and saving up for that 20 per cent mortgage deposit to buy a house typically takes more than a decade in most capital cities.
With fewer Australians able to buy their first home in their 20s or 30s, the Prime Minister used the Liberal Party campaign launch in Brisbane on Sunday to unveil the Super Home Buyer Scheme.
This would allow first-home buyers to invest up to $50,000 or 40 per cent of their superannuation if they had saved for a deposit of at least five per cent.
The scheme has no home price limit and is available for a brand new or existing property.
Australians in their mid-30s would benefit most from their scheme, which Labor leader Anthony Albanese and superannuation groups are opposing.
This Millennial demographic would typically have sufficient super savings by that age that could be invested in a first home three decades before retirement age.
They would also be in a position to get into the housing market when they were still young enough to get a bank loan with a 30-year term to pay it off.
This becomes harder to obtain as a potential borrower ages.
Mr Morrison, Assistant Treasurer Michael Sukkar and Superannuation Minister Michael Sukkar claimed the Super Home Buyer Scheme would slash by three years, on average, the time it would take to save up for a mortgage deposit.
Senator Hume said she wished this kind of early access scheme existed when she was saving up for her first home, noting the 10 per cent compulsory employer contribution to super.
'That's your savings remember - one dollar in 10 of everything you earn goes into superannuation,' she told The Project.
'Not only is it your savings that you can then put into your home, because you've got more equity in your home, your principal and interest repayments are lower.'
CoreLogic head of research Eliza Owen said the policy would at least help first-home buyers overcome the deposit hurdle.
'Considering the importance of housing as a contributor to lower housing costs, greater financial independence and higher living standards at retirement, the government's policy to utilise a portion of superannuation to enable home ownership has some merit when considering housing as an investment in one's future,' she said.
Getting into the market sooner means a first-home buyer doesn't have to be delayed from owning a house or unit as property prices keep rising.
Last year, Australia's median property price surged by more than 22 per cent - the fastest annual pace since 1989.
The mid-point price of an Australian home stood at $748,635 in April when Reserve Bank interest rates were still at a record-low of 0.1 per cent, CoreLogic data showed.
That meant a buyer needed a 20 per cent deposit of $149,787 to avoid having to pay costly lender's mortgage insurance.
CoreLogic and ANZ calculated that saving up that for deposit in March took 11.4 years, going by the median time it took to put away 15 per cent of income a year.
That figure was also based on a household income where a couple was typically saving up for the deposit.
In Sydney, where the median house price is $1.417million, saving up for that deposit takes 17.7 years.
Saving up for a 20 per cent mortgage deposit to buy a house takes more than a decade in Melbourne
