This paper discusses enabling home buyers to access their superannuation accounts when buying a home. It proposes that allowing Australians to access their superannuation for housing could significantly increase homeownership rates and provide more flexibility in retirement planning. The paper acknowledges concerns expressed about using superannuation for housing, but suggests those concerns can be mitigated. The paper discusses the rationale for the proposal, the quantitative effects and alternative approaches.

Key findings

• Estimates that a policy of superannuation for housing would substantially increase the demand for housing and/or boost the homeownership rate.
• Estimates that median first-home buyers could increase their deposit by 92% if allowed to access their superannuation.
• Allowing superannuation for housing could bring forward home purchases by an average of 2.8 years, potentially increasing homeownership rates by 4 percentage points (from 66% to 70%), enabling 392,000 households to buy a home earlier.

Recommendations

• To avoid reducing retirement savings, superannuation should be used as security for home loans rather than allowing withdrawals.
• To prevent housing price inflation, superannuation for housing should be paired with policies to increase housing supply, such as relaxing zoning restrictions.
• Superannuation for housing should replace policies like First Home Owners Grants, which have similar objectives but are costly and inequitable.