How First Home Buyers Using Superannuation Will Affect Investors

There has been alot written, discussed and pondered over by many of Australia’s greatest economists, thinkers and policy makers. The underlying topic all the experts are trying to solve is how can property become more affordable for first home buyers?

One of the newest ideas is allowing first home buyers access to their superannuation to help towards funding the property purchase. If this policy becomes reality then it will continue to be happy days for investors and current property owners.

Namely demand will increase as first home buyers re-enter the housing market. Many may even push into a higher purchase price bracket.

The newfound competition from this policy will continue to put upward pressure on prices. One aspect of the goal will be achieved. That is helping first home buyers enter the market. The flow on from the policy will be increased competition and upward price pressure.

Many believe simply increasing supply will reduce demand. You would think this to be true based on the most fundamental lesson you learn in Macroeconomics, which is Supply & Demand. In Sydney, this supply has come in the form of new apartment developments and to a lesser extent townhouse developments in the inner to middle ring. House and land options are about 40km from Sydney CBD. Have these options helped first home buyers? Yes, it has helped many. But there are many who aren’t willing to live further out. Has this supply put downward pressure on prices, resulting in more affordable housing? No. Well not yet. Should a first home buyer purchase a property just to get into the market even if it is an investment? It would make sense.

This policy helps first home buyers access more money. Does giving first home buyers more money make property more affordable? No. It doesn’t make it more affordable. But it does make it more accessible.

If you put yourself in the shoes of a first home buyer, then you would want anything that helps to buy your first home. Whether you live in it or not. Even if that means potentially driving up prices. At least you will have the chance to buy.