Call to use super for home deposits sparks debate

Shadow housing and homelessness minister Andrew Bragg urged that Australia’s superannuation framework give precedence to full home ownership, contending that employees ought to draw on their retirement savings to buy their inaugural residence. He delivered the suggestion at a Wednesday media briefing held by the Australian Computer Society in Sydney.

Citing the latest Intergenerational Report (IGR), Bragg emphasized that housing remains a key component of Australia’s retirement framework, which includes private savings, superannuation, and the Age Pension. He highlighted that owning a home offers economic and emotional advantages that surpass those of other financial investments.

Home Ownership and Retirement

Bragg noted a rise in the percentage of retirees renting, from 6 percent two decades ago to 12 percent today, with forecasts suggesting this figure could reach nearly 1 million in the next ten years. He expressed worry that renting might become an unavoidable aspect of retirement planning.

Bragg referenced mandatory savings programs in Singapore, Canada, and New Zealand, where funds can be allocated toward housing. The Super Members Council (SMC) opposed this idea, cautioning that early superannuation access could raise property prices and rents, diminish retirement savings, and heighten dependence on the Age Pension.

The SMC highlighted New Zealand’s experience, where a similar policy led to property prices rising at double Australia’s rate until the 2022 market peak. During this period, home ownership among New Zealanders in their 30s decreased by 7 percentage points, according to the council.

Concerns and Counterarguments

A 2025 SMC-commissioned study predicted that allowing first-time homebuyers to access superannuation for a deposit could increase Australian property prices by up to 10.3 percent. Misha Schubert, SMC’s chief executive, advocated for increasing housing supply as the solution to affordability issues, rather than encouraging early superannuation withdrawals, which would likely drive prices higher.

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Bragg challenged the notion that superannuation withdrawals would inevitably increase property prices, drawing a comparison between the opposition to the Coalition’s policy and the government’s 5 percent deposit scheme. He also questioned the separation of superannuation and housing policies, noting that 32 percent of superannuation lump sums were used to pay off mortgages in the previous year.

Bragg suggested a retirement policy hierarchy, prioritizing full home ownership, followed by acquiring income-generating assets to supplement or replace the Age Pension. The IGR predicts a decrease in Age Pension spending from 2.3 percent to 1.8 percent of GDP by 2066.

The SMC cautioned that relaxing preservation rules could jeopardize the anticipated reduction in Age Pension costs. Bragg argued for reevaluating a system that might leave workers with significant superannuation but no home, potentially forcing them to rent from institutional investors in retirement, despite 80 percent of Australians viewing superannuation as essential for their retirement.

Additional data from the Intergenerational Report indicates a projected decline in the proportion of pension-age individuals dependent on government support, from 66 percent to 52 percent. The SMC compared Australia’s pension outlook with that of the United Kingdom, Canada, New Zealand, and the United States.

The council noted that cashing out super would push up Age Pension costs for taxpayers, leaving less money to fund essential services. Misha Schubert emphasized that this would have a negative impact on battling households that rely on these services.

Retirement Savings and Home Ownership

Council-cited research revealed that 80 percent of Australians consider superannuation vital for retirement, while 88 percent of older Australians are apprehensive about policies allowing early access. A National Seniors Australia survey found that over 70 percent of seniors believed they wouldn’t have sufficient retirement savings without compulsory superannuation.