Could dipping into your superannuation help you get into the housing market? The coalition certainly thinks so, in a newly reconfirmed policy designed to soften the housing market for first-home buyers.
So, what is the policy?
- Up to 40% of your deposit balance could be withdrawn from superannuation funds for first-home buyers
- This 40% withdrawal is capped at $50,000
Heather Moore breaks down the pros
- Anyone who has been struggling to break out of the “rental cycle” can take advantage to accelerate them towards entering the housing market
Heather Moore breaks down the cons
- Many experts, including those at Knight, have communicated concerns that this new policy will further inflate the cost of homes. Given Perth property values are set to grow by 10% in 2024, according to REIWA, this could effectively make the policy’s objectives redundant
- The overarching cause of higher house prices in Western Australia is low supply which will not be solved by this policy – in fact, it will only drive the demand higher
- Superannuation is designed to help Australians to a smooth and comfortable retirement. Withdrawing too many funds from superannuation early in life can dramatically impact your accessible retirement funds at a later date
So, you’ve heard from Knight’s perspective. What should you do if you are trying to save for your first home?
We don’t like to reinvent the wheel at Knight. Our experience and expertise come from the fundamentals of finance above all else, with a knowledgeable team that knows how to tailor a financial or accounting plan to your unique circumstances. Heather Moore is a firm believer in this when it comes to saving for your first home:
- Look at your expenses! Where are you spending the most money, and what can you do to reduce your spending to help you achieve your financial goals?
- Research the first home super saver scheme, or book an appointment with Knight to determine if this is a suitable and applicable option for you.
With smart and strategic financial planning you can make this policy work for you. As always, Knight recommends booking an appointment with your financial advisor to consider all of your options and make a plan that best enables you to reach your financial objectives.
