Coalition's Proposed Plan To Enable First Home Buyers to use Up to $50k in Super Towards House Deposits

Well, another genius bit of vote buying responsible fiscal management has been announced. First home buyers will be able to withdraw up to $50,000 from their super, not to be confused with the FHSS scheme, where the money had to be voluntarily added to your super fund first.

So the price of housing increases purely because people will instantly have more money to buy with, same as it did with first home buyer scheme, covid building grant scheme etc. On top of that, we will have people taking out huge chunks of what is meant to sustain them in retirement, missing out on a tonne of compounded investment returns.

Do people actually buy this rubbish? So they actually think this is a responsible thing to do?

Link here thanks to Hybroid

Comments

            • @netjock: Let people learn from experience and not from nanny states.

              https://pics.me.me/hard-times-create-strong-men-strong-men-c...

              • @rektrading: You are just a joke aren't you.

                We are nowhere near a nanny state, people just seems to want to wheel that old argument out whenever there is something they don't like.

                Crypto is your favourite unregulated asset. Tell LUNA holders your nanny state stories. They wish there is some fall back.

                • @netjock: The proposed policy is to allow young people to take money out of their pension funds and use it to buy a home.

                  It's financially justifiable for them to move their money from volatile assets to a stable hard asset like real estate.

                  • @rektrading: That is not what the charts over 20 years say. But you know the hard asset might be worth $3m at retirement and your super $300k. Knock out a brick a day to take down to the supermarket to swap for groceries.

                    • @netjock: Homeowners can take out a reverse mortgage.

                      https://www.investopedia.com/mortgage/reverse-mortgage/
                      What Is a Reverse Mortgage?
                      In a word, a reverse mortgage is a loan. A homeowner who is 62 or older and has considerable home equity can borrow against the value of their home and receive funds as a lump sum, fixed monthly payment, or line of credit. Unlike a forward mortgage—the type used to buy a home—a reverse mortgage doesn’t require the homeowner to make any loan payments.1

                      They can use this tool to see how far $3M will get them.
                      https://www.mortgagechoice.com.au/home-loan-calculators/reve...

                      • -1

                        @rektrading:

                        Homeowners can take out a reverse mortgage.

                        So I'm going to work all my life to pay off my mortgage then give it all back? Pity most people think like you.

                        • @netjock: They can pay the RM when they tap the pension.

                          • @rektrading: Tap the pension. It is hard enough to live off it.

                            • @netjock: Why should taxpayers pay pensions for people living in 3 million dollar houses?

                              • @mdavant: Rektrading said tap the pension. Not me!

                                • @netjock: No, you are against reverse mortgages / people funding themselves.

                                  If people don't fund themselves then where does the money come from?

                                  Hint - one area is from the people who are already disproportionally funding the system, the greedy, evil high income earners.

                                  • @mdavant: I am against reverse mortgages. What is the point of buying a $1m home now and reverse mortgaging it in 35 years and give it all back after 30 years. Might as well just buy a $500k home and actually have liquid assets.

                                    I am against the idea of tapping the government pension to pay reverse mortgage because that is just pretending there is government money or enough of it to pay a reverse mortgage.

                                    Not against people funding themselves. I've got so much in super I'll hit the lifetime super limit by if returns follow historicals returns in the next 30 years. Might even hit the limit before then. I'm not even a high income earner. I have a house with a mortgage but I've chosen to buy below the the average price.

                                    Think you might be misreading what I am trying to say.

                                    • @netjock: Ok.

                                      So just to be clear, do you think ppor should be means tested?

                                      • @mdavant: Just to be clear. I don't give a rats if ppor is means tested or not. If you want to sit on $1.5m house with $300k super and struggle on government pension vs living in a $800k house with $1m in super people's choice.

                                        I just thinking spending all your life paying off your house to just give it back in a rrverse mortgage is the pinnacle of stupid. It is like renting off the bank.

                                        • @netjock: Well I differ and think that the ppor should be means tested

                                          Why should taxpayers pay for a pension for someone who can clearly comfortably pay their way as they are a multi millionaire

                                          • @mdavant:

                                            Well I differ and think that the ppor should be means tested

                                            I don't give a rats doesn't mean I say yes or no. May I just suggest to think about how it is going to work. Is it going to be any amount above annual average (from which index), it is across the country (probably below average in some major cities than others and regional vs metro). I could go on but I won't.

                                            Personally I am working off the assumption that there won't be a government pension (makes planning easy). How much do I spend now and what do I need to reproduce that kind of income in retirement, can I make it or what kind of cut backs would I need to make.

                                            • @netjock: You should seek financial advice :)

                                              As for my opinion on the asset test limit, I think the current limit would suffice.

                                              I don't see why other taxpayers should be paying for the inheritance of wealthy retired people's children.

                                              If you can support yourself you should.

                                              Too many people on the government test from birth to death.

                                              Strayamaaaate

                                              • @mdavant:

                                                You should seek financial advice :)

                                                I do work in finance. I've done more years in finance at uni and post uni than most financial planners.

                                                I don't see why other taxpayers should be paying for the inheritance of wealthy retired people's children.

                                                If you are talking about high net worth who can afford expensive accountants and off shore schemes than it might be true but that is like the top 1%. The other top 9% of salary earners actually pay significant amounts of tax, a lot more than they take out.

    • +2

      Currently your PPoR is not asset tested. So guess what the next change will be folks.

      So even people who didn't use these schemes (this one, and the other one where government buys up to 40% of your home) will be forced to sell their home and spend most of that money before they can receive any pension. Thus you die in poverty so only the first few people got to buy their homes before prices exploded again thanks to more government interference in the property market.

      • An overpriced roof over your head now but retire into poverty.

      • I have zero issues with houses being asset tested.

        It ensures a fairer and better use of resources.

        • LOL it's not even remotely fair. because your "resources" don't belong to ME, or vice-versa.

          That aside, homes around here were about $400K a few years ago. Recently a house nearby sold for $1.6M (and it needs to be condemned).

          • So a few years back a pensioner couple retire, receive $400K combined in super. Even with that money sitting in their bank they would have still qualified to receive most of their pensions.

          • But instead they decide to buy the cheapest $400K home in the area. Which means they need a bank loan for say $30K to cover all the fees, stamp duties, moving costs, etc. They now OWE… $30K which will take at least a few years to repay on a pension.

          • Immediately upon purchase they lose the monthly interest earning on the cash. But they free up their rental for someone else to live in.

          • A few years pass. Its value is now $1.6M. One of them has died. The other is still paying all the same bills (except food) but getting half the pension because it's just one person now. They cannot return to work to earn more money. They've only received a few, few-dollar a fortnight increases in their pension - while every expense has gone up 10-20%.

          Why should they be forced out of the home they worked and saved for, while paying tax on those earnings (which went to pensioners before them), lose thousand$ in fresh real estate agent fees on the forced sale, then try to find a much cheaper and nastier home only to have it to happen again in a few years time.

          But wait - they can't buy again anyway, because a rising tide lifts all boats. So all property in the area has gone up, so if they buy a $1.6M home in the area, they still lose their pension due to the deranged new assets test.

          So they'll have to either move to an outback town leaving everything and everyone they know behind, or live in a caravan park full of bogans and drug dealers, eating 2-minute noodles the rest of their life because they can't get any pension with the cash, so their savings steadily decrease meaning their kids receive no inheritance which would have helped THEM buy a home.

          And that assumes their kids and grandkids weren't already living with them for 15 years trying to save THEIR deposit.

          Other pensioners who have been through it will tell them to just squander their money away. Because they can't afford to buy, can't get a pension, so they may as well spend up big! And when that money dwindles to a certain level, they'll be getting MORE pension, costing the tax payer more, than if they'd just been left alone. And again, their kids/grandkids won't inherit a huge deposit meaning TWO generations are now poor their entire lives, with homes several times the price by then thanks to foolish government policies.

          • @Faulty P xel: Reverse mortgage.

            Simples

            • @mdavant: Same thing. You're spending your asset leaving you and/or your descendants poorer.

              • @Faulty P xel: That is exactly what I expect.

                If you can afford to pay your way, you should………wait for it……. Pay your way.

                • @mdavant: And how many times and for how many people should they "pay their way if they can afford it"? i.e. They DID "pay their way"… and they also paid for a bunch of other peoples' way TOO. Here's an example for you…

                  1. 20 years ago bogan one lives in Broken Hill. He gets the dole, deals drugs, does break ins to steal and pawn stuff… He knocks up the 20 year old town pushbike who already had three kids to three different guys. Houses there were awful but dirt cheap especially that long ago. She vomits out his kid, kicks him out a week later, uses her baby bonus and payments from the four different guys to buy a $10,000 hovel. She now sits back on single mothers pension, pops out another baby every so often to some desperate sucker until she hits 40. Retirement age is 65. So the last couple of kid born when she's 40 guarantee she's on single mothers pension until they're 15-16, at which point she retires. Her entire adult life the most strenuous thing she's done has been lifting a 2L bottle of coke to her rotting teeth, or splaying her legs apart (because she even had a free epidural for all the births).

                  2. At the same starting point 20 years ago, a guy in Ryde leaves school at 16, packs Coles shelves at night, is a bricklayers labourer during the day, goes to TAFE, gets qualified, meets a student teacher, gets married, opens his own bricklaying business, has 3 kids who they send to Uni. All three get ok jobs but not doctors/lawyer type jobs… but entire family is productive, earning wages, all paying tax. He finally saves enough for a house deposit at age 40 (after 20 years being held back due to paying for the pot, durries, coke and McDonalds for… oh, at least 10 bludging "families" at example #1 via his taxes). He's also employed, trained, paid the wages of maybe 15-20 other people over that time who have also gone into the workforce to pay taxes too. At age 47 he has a heart attack and dies. Wife struggles on teacher's wage for the remaining 18 years of the home loan, sees property prices skyrocket, realises her 3 kids will never afford a home without her help due to government economic mismanagement. So she continues working through and another 8 years past retirement age.

                  Why should the wife from example #2, from a couple who both worked, paid taxes, employed others, raised children who also got jobs and are still paying taxes… have to sell her home or lose her pension when THEY paid for so many lazy feral bludgers… while the Broken Hill skank with every venereal disease known to man, gets to keep her home and full pension. All while skanky continues bludging, inhaling Big Macs in threes, and guzzling large thickshakes till the forklift comes to lift her through the front window onto a pallet truck to take her to hospital for her 4th free heart bypass surgery.

                  Thank goodness you're not responsible for forming government policy.

                  • @Faulty P xel: Because there are many others who are paying for the wife too when the wife can easily afford it.

                    It is the wife's children who will inherit the property, and why shouldn't she pay her way.

                    But don't worry, you can expect others to pay for her and the so-called broken hill bogan.

                    Why not. As long as it is not you paying for it hey.

                    • @mdavant: The reason "she shouldn't pay her way" is because she already did!

                      And no - she can't "afford to support herself." Because her "money" doesn't exist - it's the house. And Ms Feral owns a house too, both get the same pension, but Ms Feral always gets to keep HER home.

                      It's selfish and dumb to make her sell her home and eat that money. She worked, paid taxes on the income, so should never pay anything "into the system" again unless she has savings, investment property, a trust beneficiary, etc.

                      They could have moved early on on life, bought in Bogansville and did bricklaying there too, but instead lived it up, spending every cent on fine dining and world cruises, and only when she has $0 and a much cheaper home like the town bike, only THEN she gets to keep her home!? LOL.

                      This is the type of selfish and nasty people who exist today. Punish the person who contributed, not just once, but over and over again/ People who think pushing someone hundreds of km away from friends and family because they don't die soon enough for their home to be put on the market. (And they still won't be able to afford to buy it anyway, all they did was make her poorer, miserable, and teach her children they're better off getting a degree in "bogan." All while rewarding the lazy who do nothing but take.

                      The fact is your PPoR should never be counted as an asset for these very reasons.

                      • -1

                        @Faulty P xel: How naive.

                        How about a person who owns a 500k house and has 2.5 mil in shares.

                        How is this scenario different.

                        And I wholeheartedly disagree.

                        No

                        The lady in your scenario definitely did not pay her way.

                        She is on the take unnecessarily for the last 40 years of her life.

                        We are in a trillion dollars debt.

                        If you can easily pay your way, you should.

                        I bet you don't contribute much, hence being so defensive of your future entitlements.

                        Strayamaaaate

                        • @mdavant: Of course it's different. You said why. $2,500,000 in shares! When I'm talking about someone who owns their home, pension their only money, being forced to sell before they can receive that pension.

                          And how is the person who paid tax "on the take", while the person who paid none and received it 2 or 3 times longer is a-ok?

                          • -1

                            @Faulty P xel: I see no difference in asset value.

                            Why should the person who invests in companies be expected to eat their capital but not the one who invested in residential real estate.

                            Anybody who can very easily find their own way who is a recipient of government handouts is on the take

                            We will disagree on this, there is no way I can convince you, I know.

                            The only way you will ever understand it is if you ever become a high income earner and stop receiving, or stop expecting to receive handouts.

                            Damn Howard and his middle class welfare that all the dependent people defend as their rightful entitlement.

                            Strayaamaaaate

                            • @mdavant: What of the argument that an age pension is not welfare. It's a covenant where a person pays (high tax in oz) their working life with an expectation that part of those funds are then passed back in old age.
                              This was the way things were viewed by my parents, grandparents etc. It was probably Howard era where it was started to be viewed by some as welfare. I bet the politicians certainly don't view their pension as welfare.
                              And yes certainly there will be those that never contribute, live a life on welfare and get it anyway.

                              Other ways to look at it, instead of the traditional, parents raise children, children support parents in old age, in Australia this is done collectively as a society.

                              • @tonka: It is not universal, it is means tested.

                                If it were to be universal then ok, sure.

                                But it is means tested, and a person with a 3 million dollar property has the means to support themselves from retirement on.

                                There is also an argument that the person did not have many in the generation before them to pay for, whereas my children and grand children will have many more to support.

                                In the end, we need to stop employing an entitlement culture.

                                If you can afford to pay, then pay, otherwise you are selfish and expecting others to pay for you.

                                • @mdavant: I don't think it used to be means tested, that's part of what I mean by it's perception changing from being a pension to being welfare. Is the war veterans pension welfare, or public servants. Sure the government has been trying to transition the pension to superannuation. But people retiring now and in 15-20 years will only have had the lower superannuation benefit for most of their careers. At least for them the pension should be considered that and not welfare. So I am viewing the age pension, for those generations, really as a similar entitlement to superannuation, not welfare. And it shouldn't be mean tested for those reasons.

                                  • -1

                                    @tonka: Well it is means tested now and the boomers have had the greatest times to generate wealth, and have proven that they can.

                                    If they can now afford to pay their way, and they clearly should.

                                    Like all the following generations will have to.

                                    (And if any posters mention interest rates then they are in denial)

                            • -1

                              @mdavant:

                              Why should the person who invests in companies be expected to eat their capital but not the one who invested in residential real estate

                              • Because you don't live in the stock market/shares/bank balance - you do live in your house.
                              • Also because it takes a few keystrokes or phone call to your stockbroker to liquidate shares, but cannot guarantee your home will sell in 4 weeks (which is about how long it takes most people without money to buy food to starve to death).

                              We will disagree on this, there is no way I can convince you, I know.

                              Technically the government doesn't agree with you either. Not yet anyway.

                              The only way you will ever understand it is if you ever become a high income earner and stop receiving, or stop expecting to receive handouts.

                              But I wasn't referring to someone with large savings. I was referring to someone who bought a home years, even decades ago for a couple of hundred thousand while working, which increased in value in response to nothing they did, and who then retired. Some think once the owner hits old age, they should be forced to sell, use up that money to live, after moving out of the area to buy cheaper (where it could happen again), breaking friendships, leaving family and everything familiar behind. It's just plain mean. It's an "f-u and your friends and family and hope you die cold and hungry" to the main group who paid the most in. (Welfare recipients and business pay little to no tax.)

                              Even so a huge amount in savings does not = high income earner. Because bank interest is virtually, or actually, zero right now. Btw government/Centrelink disagrees with you there too. I don't know the exact amounts, but you can have quite a lot in savings yet still qualify for full welfare. Only once you have over a certain amount do payments begin reducing by X cents for every dollar, where X keeps increasing until payments reduce dollar-for-dollar.

                              Damn Howard and his middle class welfare that all the dependent people defend as their rightful entitlement.

                              LOL. You probably didn't mean it this way, but this basically implies "bludgers" and "the rich" should both get welfare when neither paid any/much tax, while the one group who did pay plenty of tax that supplies welfare payments - shouldn't.

                              Anyway, IIRC Labor was communist-founded, and has since morphed to a socialist bent. So if anyone is more to "blame" for generous welfare… ;-p Traditionally Liberal would get strict with money to pay down Australia's debt (usually incurred by the previous Labor government), then when Labor got the last musical chair next election, they'd spend up big again. And so it went back and forth for decades until the most obvious veer from the norm being Snotty from Marketing.

                              The fact is, and government agrees, everyone should be able to retain some level of assets to themselves without being molested by government. It's both mean (and in a rare instance of government insight and commonsense) counterproductive to expect people liquidate and "spend it all first" before qualifying for welfare. The government that does so deliberately drives people into poverty and future PERMANENT dependency on welfare. Partly because people get used to getting by with less, and partly because they have no resources to build upon which could get at least some off welfare.

                              Leaving people with some level of assets, reducing payments on a sliding scale, means at least some will become self-funded. But tell them "spend it all first" means none will be - resulting in more people on welfare than if they'd been allowed to keep some. For the short term gain of "it's fair to everyone else you should have to eat your assets first" government gains their long term welfare dependency, meaning it collapses, ruining it for all in the end anyway.

                              • Your PPoR, when purchased years before receiving welfare payments, should never be considered an asset.

                              • The exception MIGHT be in certain cases only. Like someone about to retire sells their business for million$ which they convert into a multi-million man$ion with the intent to receive a full pension. Or when someone makes a recent multi-million $ home purchase in an area surrounded by other homes mostly worth several times less (again with the intent to receive full payments).

                              • Government should and does set where these time and value limits are. But a blanket: "spend it all first" is what will cause the early demise of welfare for everyone.

                              • If government ever did become so punitively vulgar as to require the sale of people's long-held PPoR, they should:
                                a) Require proof the home has been listed for sale, then…
                                b) Provide full welfare payments until the property has sold and the money transferred (because you can't eat furniture in the meantime).

                              • -1

                                @Faulty P xel: Tldr

                                What is the difference to a share portfolio or bitcoin purchased for SFA which appreciates.

                                There is no difference

                                As for the the govt not agreeing. You can't be sure of that.

                                The govt might very well agree, but the political fallout would be too severe.

                                Welfare recipients will vote to keep their so called entitlements.

                                It is all good when SOMEONE ELSE is doing the HEAVY LIFTING.

                                Cause
                                It's
                                Strayamaaaaaate

                                • -1

                                  @mdavant:

                                  What is the difference to a share portfolio or bitcoin purchased for SFA which appreciates.
                                  There is no difference

                                  The difference is one home (the first one anyway - your PPoR) is for the purpose of living in, so not an investment vehicle with the expectation of making more money like Bitcoin. And a rising tide lifts all boats. So if you buy a house at any time throughout history, it will still have relativity the same purchasing value (not price) to all other houses in that same area… forever. So your home VALUE didn't increase, it remained stagnant in comparison.

                                  So if all your personal value is in your home and you have no other money - your house is an illiquid asset, and to liquidate it takes time and huge fees. But if your value is in shares, bitcoin, cash, etc it's already liquid - readily liquidated, with low to no fees.

                                  And forget the court of public opinion… there would be a legal minefield that would sink any government who tried this on. e.g. The wife doesn't qualify for a pension until she sells… so who dictates the amount the home should sell for, so how long the vendor should hold out to obtain the best possible price, what happens when government forces them to sell below market value to obtain a part pension because the vendor is starving, does government have to pay her a pension while the property is listed so she can eat in the meantime which would be an admission of duty of care so who pays (the taxpayer) when she later sues government after discovering the nearly identical house next door sold just a week later for $300,000 more, … the list goes on.

                                  As before, comparisons are useful when making new laws. Ms Bludger didn't have to sell her home but receives full pension. Someone else being forced to sell their home because it went up more/faster/differently in value to Ms Bludger's place is wrong. Make both sell, or neither. And if making both sell is wrong, then so is making one sell. Because it's entirely possible someone who bought in say Blacktown in 1960, may have paid the same relative amount (after adjustment for inflation) as Ms Bludger of Boganville did in 2000. But let's force only one of them to sell?

                                  Blacktown person shouldn't (only) be forced to sell because their home happened to increase more/faster. It would be like the ATO taxing someone on some vague cryptocoin every year though it's never increased in value compared to cash or shares. (You only pay tax on profit. A stagnant coin has no profit thus no tax. Stagnant house value or a PPoR has no profit either so shouldn't be counted as liquid income.)

                                  As for the the govt not agreeing. You can't be sure of that.

                                  Just meant that what I've been saying is the way it currently is.

                                  The govt might very well agree, but the political fallout would be too severe.
                                  Welfare recipients will vote to keep their so called entitlements.

                                  Yep. If they did it, they'd probably have to "grandfather" it in. i.e. "This only applies to home purchases from Jan 1st next year." Or the legal attack from so many different angles and groups would sink the current government.

                                  • @Faulty P xel:

                                    So if all your personal value is in your home and you have no other money - your house is an illiquid asset, and to liquidate it takes time and huge fees. But if your value is in shares, bitcoin, cash, etc it's already liquid - readily liquidated, with low to no fees.

                                    Homeowners can tap the liquidity of the asset using an ELOC.

                            • -1

                              @mdavant: I gotta ask though, if they were going to require someone to sell their shelter, why stop there, why not car, clothes, heirlooms, appliances, maybe the cavoodle (they can be valuable).
                              The reality is the purpose of shares is as an investment, the primary purpose of a residence is shelter, which is considered essential for survival.

                              • -1

                                @tonka: No.

                                The abuse of the investment vehicle which is the ppor is just that, abuse.

                                It shouldnt matter what the use of the asset is, just the value.

                                In some deeming, assets are counted.

                                • -1

                                  @mdavant: So the Cavoodle to then. My great, great grandfathers military sword has some value. My grandmothers engagement ring ? I've got a few toys and comics that have gained some value. And my point is there is no way to measure these things. A shack in Sydney is an expansive mansion elsewhere. Shares are always the result of investment, property is not and there are measures in place to means test property, a residence has restrictions on land size etc to be able to still draw pension. There are economic hurdles as well, an expensive house has expensive rates and maintenence. Can someone eligible for a pension afford to maintain a mansion at Potts Point. And don't those with shares and share income have some dodges as well around deeming rates and franking credits?

  • +5

    Modelling released five months ago by the McKell Institute found that allowing prospective buyers to access $40,000 of their superannuation would push up house prices in Sydney by more than $40,000 and in Brisbane by almost $100,000.

    It found an additional $25 billion of debt would be incurred by Melbourne households while debt in Sydney would increase by $23 billion.

    Labor’s housing spokesperson Jason Clare described the Coalition’s policy as “the last desperate act of a dying government”.

    “Every heavy hitter in the Liberal Party of the last generation that have looked at this issue have knocked it on the head – whether it is John Howard, Peter Costello, Malcolm Turnbull or Mathias Cormann,” he said.

    It comes after a parliamentary committee chaired by Liberal MP Jason Falinski recommended in March that the government allow buyers to use their superannuation as security for a home loan but not as a deposit.

  • Supply; demand.

    What do people here think about financially penalising (more than just land tax) those owners of properties that are empty for xx% of the year? Primarily 'holiday homes' but also apartments in CBDs.
    A lot of regional areas, particularly those that are tourist-driven, are screaming out for people to work but a lot of people can't find anywhere to live in those areas.

    • I wonder if part of the problem though is those jobs on offer are minimum wage with under employment/no job security. And the same people that want to employ cheap casuals in their hobby cafes block the councils from approving cheap housing developments.

      • Plenty of jobs in regional areas are not minimum wage, and there are plenty of jobs going. That is why this government is encouraging overseas workers to come.

        To me, it seems non-sensical to destroy the very reason some of these places exist (nature, serenity, etc.) to build more housing when there are already a high percentage of liveable houses ready for people to move into.

        • Yes and a few of those jobs will be full-time permanent type jobs as well. But where it's not full-time stable work, is it reasonable to ask people to turn their properties into boarding houses or rent to people without secure jobs.
          I'm just saying that a lot of businesses wants so much flexibility in their workforce that a lot of people can't compete for the homes that are there anyway.
          Even big business now is building models where 30% of their labor is casual so they can turn it on and off at their convenience.

          • @tonka: I'm not saying the property owners have to rent it out. That would be their option, and would include all the considerations such as income, expenditure, taxation, along with the usual bond arrangements to cover damage or rent shortfalls.
            Or, the property owner could sell their unused property, making it available for others to actually use.

  • +1

    I had to laugh… I rarely watch friendlyjordies but saw a recent one where he said Liberal was responsible for property price increases and Labor will do much better. But Labor was saying they'll buy up to 40% of your home, which does guess what - drive prices up even further lol. And now this.

    Government needs to stop interfering with property. Every time they try to influence/manipulate they make things worse. And we all need to stop voting for Liberal/Labor/Greens because they'll never stop interfering: https://www.youtube.com/watch?v=NfqfJO3JuZ8

    • And we all need to stop voting for Liberal/Labor/Greens

      Who is the best to vote for who will take active rolls in renewables, reducing climate impact, and building infrastructure for the future of the country?

      • -1

        It's difficult to judge from your wording, but if you believe most (or all) the Greens say then I'm not an expert in deprogramming techniques. ;-D

        But in case you were genuinely asking, then in spite of what the Greens portray, the majority of people are already on board with protecting the environment. However they also recognise the fact we could do literally everything the Greens can dream up, but it would make zero overall difference thanks to China/India/etc. Meanwhile, as we're virtue-signalling to give each other the warm fuzzies we're somehow making a difference, those other countries will have little to no such restrictions. So they will not only continue what they already do now (which contributes the overwhelming majority toward the Green's fantasies), but they will also be encouraged to do even worse as they sprint toward the opportunity to become first world nations. Meanwhile, as we descend toward third world status ourselves, now eating bugs (because: cow farts), embracing the scourge of socialism (stealing our neighbours pet/s so we don't starve), and owning nothing but being - ahem - "happy" (Klaus Schwab)… then we would lose the teeny amount of influence we had with the rest.

        In short, the whole carbon/climate change nonsense is a Little Golden Book collection of fairy tales for adults. They manipulate data, they outright lie (the multiple false chicken little falling sky predictions over decades and drowning polar bears), they fund only research conditional on preconceived biases while never funding the opposite in order to reaffirm their beliefs - it's junk science, "proof" for the gullible. In fact the planet is currently in a carbon drought, and the Greens and their mind control victims should research what the end result of that could be. (Mind you that result wouldn't bother the Greens in the slightest, as they've always loathed human beings. They merely realised 3-4 decades ago parading that doctrine openly wasn't very conducive to retaining cult members as people matured, got jobs, bought a home, and raised a family.)

        So just about any party would do better than the Greens, because most people won't need the junk science and brainwashing the Greens indulge in. Thus we'll have more people on board and so achieve more without the need to join their sectarian cult.

        • +4

          wtf conspiracy theory garbage is this?

          • -5

            @hcca: It's called reality/fact. I know, it can be a strange concept, even a little frightening at first, for people brainwashed through school by climate change pseudoscience, but the rewards of breaking free and living in reality are worth it. ;-D

            Fact: When all this climate change (ozone hole/greenhouse effect) first came out, most scientists mocked it relentlessly. But as they slowly realised more and more of their studies went unfunded and unpublished by those on board with the agenda holding the pur$e, of course most succumbed and fell in line. Some time later the narrative switched to "most scientists didn't realise at the time… blah, blah." Hm… how convenient.

        • +3

          Wait are you saying that climate change is a myth and trying to make a cleaner country will result in us eating bugs and pets?

          • -3

            @Simovixet: You know what I said, and I know you know what I said. The leads are in my quote marks for those who are genuine.

            This stuff is rubbed in our noses by filthy rich dirtbags who screech rising sea levels will imminently destroy our coastlines, then buy mansions smack on the beach; want us to eat bugs while they continue dining on steak; who will always be millionaires but want the rest of us to get a universal wage, own nothing, renting everything from them.

            Look up:

            • The Great Reset
            • Klaus Schwab You will own nothing and be happy
            • The cow farts myth (hence why they want us to eat bugs)
            • The overpopulation myth
            • +1

              @Faulty P xel: Oh! Yeah fair enough, that clears it up. You're one of those

      • +1

        Who is the best to vote for who will take active rolls in renewables, reducing climate impact, and building infrastructure for the future of the country?

        Have you looked at independent candidates?
        Although the polls are pointing to a Labor majority, in the case of a minority government those independents can wield their power on these matters.

    • I guess the difference is that one uses your tax dollars, and the other uses your direct super. I sure know what I'd prefer if I was in a FHB position. Remember if you get stuck using the government purchasing scheme (like people in WA have been doing for over 20 years) you can always access your super to bail you out before you hit bankruptcy.

  • +7

    Stupid party. Stupid policy. That is all.

  • +9

    Genuinely stupid policy. This is especially bad, given that all they are doing is ruining people's retirement incomes to help prop up the housing market. A market that continues to have all the hallmarks of a bubble waiting to burst. If a buyer has to access this sort of scheme to even afford a home deposit, that is already a red flag for their financial position. They would be unlikely to absorb a market crash or a significant interest rate hike.

    The LNP never liked the concept of superannuation. Its yet another way to undermine the system, so that eventually they will have an excuse to completely remove it. The death by a thousand cuts strategy.

    Instead of handouts to first home buyers that only help to grow the housing bubble, they need to target investors to reduce demand in the market. A simple way would be to significantly increase stamp duty on investment purchases. In turn, helping to generate some much needed taxation income. But we wouldnt want to make our property developer donors cranky now would we.

    • Your idea is worth consideration, but would 'investment purchases' include all non-PPOR properties (regardless if income producing)? Such as, holiday properties?

      • Good question, and obviously there would be a lot more analysis in working out all the details and addressing all sorts of edge cases such as holiday properties. The problem is, opening up exemptions for properties like a 'holiday home', would attract exploitation of these loop holes by developers.

        I think the focus of any legislation like this, should be to push Australians away from using real estate as the default investment option. Investment into local business or other aspects of our economy would be the better option if its possible to mitigate some of the risk associated.

        A possibility is a well diversified mutual fund, similar to super funds, if you can structure tax incentives in the right way to incentivise individuals to invest their money into them. Especially if this fund could generate a solid annual return, at or above what Super funds are doing right now. Super funds already generate a huge benefit through their investment in local business, further expanding this could be a boon for our economy.

    • What would you put in place to replace the rental housing those investors currently provide.

      • Obviously more modelling needs to be applied. You may be right, lower rental supply could drive rental prices up. But it might not be too bad assuming that a portion of renters would now be able to migrate to first home owners without having to fight over housing supply with developers.

  • This would be a problematic policy to wind back. To make use of this a young person would need to contribute their disposable income to super instead of savings. Then if the policy was discontinued or changed they could lose access to that extra money and lose their deposit.

    • +5

      And is anyone starting to get uncomfortable with the way Scotty is eyeing off our super all the time. Maybe Keating is right and it's just safer if the pollies keep the grubby paws off rather than keep nudging the line.

      • Keating, the labour stalwart who lives in leave Woollahra.

        • +4

          Grew up in a fibro house Bankstown. Used to come visit his mum there when he was PM. You think he should have moved back in with her?

          • -1

            @tonka: If he didn’t see the need to get his mother out of such horrible conditions, then he clearly didn’t give a rats ass about anyone.

            • -1

              @Wasabi Ninja: I grew up there too you creep. In fact, I expect you must have grown up somewhere truly horrible to be ignorant enough to describe working class Sydney in the '70's & '80's as horrible. I would guess that house is worth more than you can afford.

              • @tonka: Whatever gets you through the day champ. I grew up in working class Armadale, Victoria. Didn’t know this was a pissing contest lol.

                • @Wasabi Ninja: Have you rescued your mother yet. Do you love when a stranger describes it as horrible conditions. Even they have no idea of the time and place at all…..champ.

                  • @tonka: My parents don’t need rescuing. Self funded retirees and enjoying life in their 70’s. I don’t mind a stranger describing it as horrible conditions. Everyone is entitled to their point of view.
                    You seem easily triggered. Are you okay?

                    • @Wasabi Ninja: Na champ, just trying to help you out. But sometimes you gotta just let boorish be.

  • I think the policy won't achieve the objectives, however there is no or a negligible opportunity cost by removing the cash from super. Assuming paying rent over the same period.

    Rent - over 30 years

    For a couple the $100,000 @ 9% YOY is worth $1.3m
    Renting @ $650pw (with 2% yearly increase) will cost $330K

    Net ~$1m

    Buy $850,000 property with $750,000 loan (3.5% average)

    Interest cost $540k
    3% YOY average property value then worth $2m

    Net ~$1.5m

    Taking money out of super wouldn't be a bad financial decision. 30 years is a long time to project and I haven't included rates, LMI and other ownership costs but back of the envelope it looks ok. However, It won't do anything to help with housing affordability in the short term but as a long term policy to effectively force people to save for retirement and a house should they choose doesn't seem like a bad idea.

    If property needed stimulus it would be THE policy to roll out. In the current market it seems to be ludicrous. Allowing the money to go back to super with tax efficiency when the couple is ready to downsize is a great idea at the other end.

    • Your calculations are off. a 750k loan over 30 years will cost you a lot more than 540k in interest costs. You haven't said what the payback per week is.

      And if it was 650pw, it is most definitely more than 540k.

      Also 3.5% average wouldn't even be correct for the last 10 years. So doubt it is going to be the average all in rate going forward for the next 30 years.

      • Payback per week doesn't really matter but it's $847. After the interest is paid that's your money. $540k in interest over 30 years is correct @ 4% (I put down 3.5%).

        You are right, I accidently punched in 650/month rather than week. That means rent is $1.4m so leaving $100K in super means you are under water.

        All I am saying is there is no opportunity cost (in fact the inverse). I've seen a few people saying there would be a huge loss from the super returns but that is just not the case.

        • As the LNP refuse to publish their own modelling on this 'policy', you have done us all a favour in your reviews.
          I doubt the LNP even have modelling.

        • +1

          Payback per week doesn't really matter but it's $847.

          It does matter because the gap between rent and your minimum repayments can be invested into another asset class.

          You are right, I accidently punched in 650/month rather than week

          You might have done something similar on the property loan because a 750k loan @ 3.5% over 30 years on minimum repayments does not equal 540k in interest.

          The whole thing is bad policy. regardless. I don't like either Labor/LNP policy on the FHB access to funding but the Labor is the lesser of two evils.

          I wish both parties would get bipartisan on changing negative gearing.

    • I'm not sure you can reliably expect 3.5% to be the average interest over a 30 year loan term. You'd want to price in 6-8% interest rates to be realistic.

  • +3

    With or without election bribes the housing problem in Australia is far more structural.

  • +4

    Strange that this is pitched to help first home buyers, but actually helps investment property owners and hurts future home buyers/renters. Australia's obsession with investment properties needs to end. It's not the only thing you can invest in and it wouldn't be the end of the world if investment properties were disincentivised long term.

    • Well a few people, those who get in early, will get a better quality home (what most will use it for) or sooner (which a few will use it for), lol. But yeah - just as we saw the FHoG do, prices will rapidly skyrocket pricing more people out than ever before.

  • -3

    The recurring theme I'm seeing in the media and forums is that people ask "how can we make housing more affordable for first home buyers?" then when either government proposes policies, everyone is against any sort of policy…

    The cycle of complaining never ends

    • +2

      how can we make housing more affordable for first home buyers

      I don't believe I've ever said this.

  • +1

    As always, for a good saver this is a blessing as buying a house (your home that is) today is positive although a big fat mortgage debt comes with it.

    A good saver will eventually retire and a good saver will/might not need to access that Super saved some 30 or 40 years before.

    For the money morons might not be that positive.

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