Could super help build homes? Adelaide Uni on One Nation claims
Pauline Hanson wants superannuation rules loosened, a Labor minister awards it “gold medal for stupidest policy”. Adelaide University researchers examine the details.
The idea of allowing Australians to use superannuation to buy a home is back. Pauline Hanson has called for the rules to be loosened, while Labor assistant minister Julian Hill awarded the idea the “gold medal for stupidest policy”.
The Coalition proposed a similar scheme at the past two federal elections, allowing first-home buyers to access up to 40 per cent of their super, capped at $50,000.
There are good reasons for scepticism, but the debate has become too binary. The real question is whether super could improve access to home ownership without simply giving buyers more money to bid up the price of existing housing.
What actually happens when buyers get more purchasing power?
The central criticism of super-for-housing is straightforward… If the number of homes available does not change, giving prospective buyers more money increases their capacity to compete for them. Some of the intended assistance can consequently disappear into higher prices.
One of us modelled the Coalition’s proposal last year for the Super Members Council of Australia. Allowing first-home buyers to access up to $50,000 of their super was estimated to bring forward 130,000–148,500 home purchases and generate $90 billion to $99 billion in additional lending, helping some households become homeowners sooner.
But injecting that purchasing power into a market where supply could not respond quickly was estimated to raise house prices by seven to 10 per cent over two years. The key lesson is that where the additional purchasing power goes matters.
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It isn’t quite as simple as “raiding super”
These proposals are not necessarily straightforward withdrawals from retirement savings. Under the Coalition’s model, first-home buyers could access up to 40 per cent of their super, capped at $50,000. When the property was sold, the amount withdrawn would return to super, together with the corresponding share of any capital gain or loss. One Nation’s proposal follows a similar principle, treating the contribution as an investment by the super fund in the person’s home.
Retirement wealth would therefore not simply be spent, but shifted temporarily from financial assets into housing. There would still be costs and risks: the money would no longer earn returns within the super portfolio, and people with larger balances would have more capacity to benefit. But that raises a more useful question than whether Australians should be allowed to “raid” their super.
Housing is already part of retirement security
Australia tends to treat housing and superannuation as separate policy worlds, but both contribute to lifetime economic security.
Owning a home outright has long been an important part of Australia’s retirement system. A homeowner with relatively modest super faces a very different financial future from someone dependent on the private rental market for life.
This raises a legitimate question: if housing and superannuation both support financial security in retirement, must they remain entirely separate forms of saving? If they are allowed to intersect, could that interaction be designed more intelligently?
What if super access had to help create a home?
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Imagine a narrower policy: instead of allowing first-home buyers to use super for any property, restrict access to newly constructed homes that add to supply. The aim would be to convert additional demand for home ownership into additional dwellings, rather than another $50,000 to take to Saturday’s auction.
The scheme could be capped, time limited and targeted to locations where development is feasible. Its essential test would be simple: does it result in homes being built that otherwise would not have existed? If not, there is little point.
New housing doesn’t remove the risks
Restricting access to new housing would not eliminate inflationary pressure. Additional purchasing power could still flow into land values, construction costs or developer margins. Labour shortages, infrastructure constraints, development feasibility and low productivity also limit how quickly the construction sector can respond. A scheme that merely increases demand for a fixed pipeline of new homes could therefore reproduce the problem seen in the established market.
There is also an equity issue. Households with larger super balances would have greater capacity to participate, while those with the least wealth may face the greatest barriers to home ownership. Any proposal would need to consider how super access interacted with shared equity, concessional finance or other targeted support.
A useful lesson from Singapore
Singapore shows that housing and compulsory saving need not be treated as completely separate policy areas. Its Central Provident Fund allows savings in its Ordinary Account to be used for housing, alongside savings for retirement.
Australia could not simply reproduce Singapore’s very different housing and retirement systems. But its experience shows that housing and retirement saving can be designed together—and invites us to consider whether Australia could do so in its own way.
A better question
Australia still needs more social and affordable housing, better planning and infrastructure, and a larger, more productive construction sector. Superannuation is no substitute for these reforms. Giving buyers another $50,000 to compete for existing homes is particularly difficult to defend if much of the benefit is absorbed into higher prices. On that version of the policy, Hill’s gold medal may be safe.
But a broader question remains. Could a carefully controlled use of super help people acquire homes while directing additional purchasing power towards new supply? The constraints on construction, equity implications and costs to retirement savings may prove too great.
That is something we can model and test. If Australia connects super and housing, the policy should help address the housing shortage rather than make housing more expensive.
Chris Leishman, Andrew Beer and Emma Baker, Australian Centre for Housing Research, Adelaide University
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