Early access pushed for home deposits
Real Estate Institute (REI) of NSW president Tony Brasier has welcomed a renewed call by a NSW Government Minister for first homeowners to have access to their superannuation for a housing deposit.
The call from NSW Housing Minister Cherie Burton last week followed the release of a new survey by Genworth Financial that showed young families were putting off having children in order to buy a home.
The Morris Iemma Government also wrote to the Federal Government last year asking it to amend the Superannuation Industry (Supervision) Act 1993 to allow first homebuyers to access a portion of their super.
Burton’s call last week is in line with a position that Brasier said the REIA had supported since as far back as 2003 as a way of enabling first-homebuyers to make a deposit on their home.
In March of that year the REIA commissioned the report Early Access to Superannuation for Home Purchase by Professor Julian Disney, Director of the Social Justice Project, University of New South Wales.
The report found early access to superannuation for property purchases would promote home ownership in Australia and could alleviate the impact of a decline in affordability of home ownership due to record-level house prices.
Brasier also qualified support for the latest NSW Government stance, suggesting that the issue has “now been raised at frequent intervals by various state governments.
“Other than statements of support from time to time, there has been no real work that I’m aware of being put in by any government to analyse and come up with a draft policy or a draft statement on how it could work.
“I think it’s probably about time that the State and Federal Government put their heads together and came up with a formula that could work for first-homebuyers.
According to Mortgage Choice, Brasier said lenders, as a general rule, currently require a deposit of 5 per cent from first homebuyers.
“Based on the December quarter 2005 Sydney median house price of $518,000, this would require first homebuyers to have saved $25,900 before being able to buy their own home.
“This is a tough call when many first homebuyers are also paying rents of around $260 per week (Sydney median rent for a three-bedroom house in the December quarter 2005), starting or raising a family, paying off accumulated HECS debts, and generally trying to realise some of the aspirations Australians hold for their adult lives.
“It is not only in Sydney where first homebuyers face difficulty,” he added. “Right across Australia the increase in house prices and the decline in home loan affordability has squeezed first home buyers out of the market.
“In the December quarter 2005, only 18.7 per cent of all dwellings financed were first homebuyer purchases, compared with an average of 21.8 percent from July 1991 to June 2002, when prices started to rise.”
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