Mortgage Choice chief, Michael Russell, has today called on the Government to allow first home buyers to use their superannuation savings as a deposit, in a effort to boost housing affordability. From The Australian:
“What I’m hoping to see from that is some sort of consideration for first-home owners to access their superannuation to avoid lenders’ mortgage insurance,” Mr Russell told a media briefing yesterday.
“(They could) use some of that superannuation to pay a reasonable deposit on a home, avoid LMI and reduce their monthly commitments.
“I think it’s about time we seriously consider it”…
“I think that’s one way of looking at (the affordability problem),” he said.
In his 50 Years of Housing Policy Failure speech a few months back, Saul Eslake showed emphatically that first home buyer (FHB) subsidies had done absolutely nothing to boost home ownership rates over the past 50-years or improve housing affordability.
Instead, as argued by Eslake, the Government should consider winding back negative gearing and removing planning-related bottlenecks, so that FHBs don’t get out-bid by investors and developers are better able to supply housing at a price that FHBs can afford.
Russell’s so-called solution would only increase distortions in the housing market and make the situation worse.
