One of the nation’s biggest home builders has backed calls to allow young Australians to use their superannuation to buy into the property market, just as the Reserve Bank signals it may tighten lending criteria.
ABN Group general manager Dale Alcock said allowing first-time buyers to use their retirement nest eggs was simply a different way to invest in their long-term future.
The Turnbull Government is likely to announce a housing affordability package in the May Budget. It comes after price spikes in Sydney and Melbourne of almost 20 per cent a year.
One idea that has been floated, but previously rejected, is allowing first-time buyers to access their superannuation.
Mr Alcock said Australia should follow a Canadian model under which people could access up to $25,000 from their retirement funds to buy a house but must repay the cash over the next 15 years.
“Rules need to be changed to help more first-home buyers to save for a house deposit and it needs intervention from the Federal Government,” Mr Alcock said.
But the idea has already attracted sharp criticism, with shadow treasurer Chris Bowen saying it was the “stupidest idea ever”.
“Early access to superannuation for a home deposit would undermine retirement savings, create new financial risks and ultimately serve no credible purpose other than bidding up the price of housing and pushing home ownership further out of reach of young Australians,” Mr Bowen said.
The stability of the banking sector is also of growing interest to the Reserve Bank.
Its financial system assistant governor, Michele Bullock, said yesterday that tighter restrictions on lending for property might be needed after the benefits of a crackdown last year seemed to be waning.
Ms Bullock said there were already signs of an over-supply of apartments in Brisbane and some parts of Melbourne.
While individual lending standards across the banks may be good, taken together a property downturn would be a substantial financial risk to the country.
“I think what individual banks do might look OK, but when you group all the banks together as a system, sometimes all of them doing a similar thing can have a very dramatic effect,” Ms Bullock said.