July 31, 2014
Mortgage Choice has welcomed Senator Nick Xenophon's plan to introduce legislative changes that would allow first home buyers to access their superannuation savings to afford a house deposit.
Earlier this week, the South Australian Senator said he would move for changes to be made to the Superannuation Act 1976 during the spring session of parliament.
The proposed changes are similar to a scheme, called the Home Buyers' Plan, which is currently operating successfully in Canada.
As part of the Canadian scheme, home buyers can access up to $25,000 for a first home. The amount borrowed is then required to be paid back into the super fund within 15 years.
Speaking about the decision to introduce changes to the Superannuation Act and allow first home buyers to access their super for a home deposit, Mortgage Choice chief executive officer Michael Russell said he supported the announcement and believed the proposed changes would help make a difference to thousands of Australians each year.
“Mortgage Choice welcomes Senator Nick Xenophon's decision to table a discussion in parliament about the need for first home buyers to access their super to help them with their home deposit,” he said.
“We have long advocated the need for the government to introduce a scheme whereby first home buyers can elect to access their superannuation for a house deposit, thereby reducing the need for Lenders Mortgage Insurance and allowing these buyers to jump onto the property ladder sooner rather than later.
“While Lenders Mortgage Insurance has a crucial role to play in assisting first home buyers into the property market, if the premium can be reduced by lowering the Loan to valuation ratio, then this would seem to be in the best interests of buyers.
“First home buyers should be allowed to invest part of their super in their own bricks and mortar.”
Mr Russell said the scheme should be put in place with the stipulation that the money will be reimbursed into the homeowners' super account either at the sale of the property or within 15 years – whichever comes first - and include gains based on an appropriate index.
“Provided the right measures are put in place to ensure the scheme is used for the right reasons, I believe an initiative that allows first home buyers to access their super to fund their home deposit would help to considerably improve housing affordability,” Mr Russell said.
According to the most recent annual affordability survey by Demographia, housing affordability in Australia has fallen for the past three decades, as house prices outstrip income growth.
At present, Australia has the second worst housing affordability in the world – behind Hong Kong.
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