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Broker industry throws support behind first homebuyer plan

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Australian Broker | 01 Aug 2014, 09:04 AM Agree 0
The industry has rallied behind a plan to allow first homebuyers to access their superannuation for a deposit
  • Timbo2 | 01 Aug 2014, 10:12 AM Agree 0
    Nice thought, but the problem remains as it would not be considered as genuine savings by the LMI's. It would be seen as a gift and would need to be held for 3 months, which I suppose is better than not having any deposit at all.
  • Incognito | 01 Aug 2014, 10:17 AM Agree 0
    Really? I don't support it.

    FH buyers don't want to use super to get a damn house. They want investors trimmed from gobbling up all the stock.

    How about phasing out negative gearing (on existing homes) and addressing the budget crisis and the housing crisis at the same time.
  • Steve McClure | 01 Aug 2014, 10:32 AM Agree 0
    2 people do not constitute a "rallying of the industry". Closer examination of the number of new buyers that this scheme would generate, implications re super accumulation, servicing, the relativity of house prices, inflationary issues and full consideration of alternative measures such as changing the FHOG eligibility.

    Not opposed to it as long as it's the best way forward. If the aim is to get more first home buyers into the market, is diminishing super for $25K the best way to responsibly achieve it? What impact would it have given prices of our capital city markets?
  • Coast Broker | 01 Aug 2014, 10:46 AM Agree 0
    Two things I see is that with some First Home Buyers an amount of $25,000 will be all of their Superannuation and secondly $25,000 will not in most case be sufficient to eliminate the requirement of LMI. It may reduce the LMI premium however I would say $25,000 from Superannuation would not be enough to reduce the borrowings to 80%. So that being the case LMI providers will need to look at their policies allowing for this injection of funds to be treated as genuine savings.
  • Regional Broker | 01 Aug 2014, 11:24 AM Agree 0
    Great Idea , will be interesting to see the detail.
  • SEQ BRoker | 01 Aug 2014, 11:29 AM Agree 0
    Yep, Fantastic idea. When someone is a home owner, there is effectively a forced savings schedule due to the mortgage and due to clever use of offsets / quasi LOC / free redraw accounts. Rather than watching your RENT go up every year, you can have the same (give or take a little) payment over 30 years which is a massive saving on expenditure over that time. Accessing super to either lower LMI or even if its full whack LMI, still puts a client ahead of the rent game and in a better position financially for life.
  • Mick | 01 Aug 2014, 11:36 AM Agree 0
    With a divorce rate of over 40% in this country, I see that as a large number of people needing this type of assistance also. Take the average scenario as I have seen it, it's the main income earner that normally loses the large portion of equity in the home and normally finds themselves having to rent and pay child support, and therefore having little opportunity to save a deposit as well as all that. At no other point can I imagine you needing more stability in your life, and being able to access some cash from your super to get yourself back into the market and create some stability for you and your children may play a large part in keeping anyone in that position sane. Furthermore, I would imagine that allowing someone like this that has already had a home (and loan) before, with experience in the workforce and stable income would be a better risk than a first home buyer. Why do first home buyers get all the incentives?
  • Robert B | 01 Aug 2014, 12:51 PM Agree 0
    Concerns 1. As long as this scheme is not just another stimulus for the housing market. 2. Buyers should still be required to demonstrate 5% savings. 3. Use of Super should on be used for the purpose of reducing LMI. 4. A long term view should be taken on use of super. It is after all for funding retirement as I doubt as many people will be elligible for the pension in the future. Over all I'm personally not keen on the scheme as it is just more market minipulation by the government.
  • Darren | 01 Aug 2014, 01:37 PM Agree 0
    With the eroding of many first home owner offerings and the widening gap between house to income affordability and savings there needs to be other methods to assist many into the home owner market. Allowing many to use super as a compulsory savings method for this purpose is excellent.....Bring it on!!!
  • marty | 01 Aug 2014, 03:08 PM Agree 0
    dumb idea
  • Maria Rigoni | 01 Aug 2014, 11:04 PM Agree 0
    Are these do gooders in the real world. New to the workforce with higher education have HESC / HELP plus debt living expenses etc. How long do they have to be in the workforce to build up the super balance in the first place to borrow against and what loan to value ratio of super are they allowed to borrow against and at what interest rate etc. Maybe we should go back to the old times and give the money into the pay-packet for people to live in the now world without additional interest expense to put a roof over their head rather than the "expectation" they will have money to live on in retirement 45 or 50 years in the future!!! Remembering the retirement age is forever increasing they may never be able to draw down on their super in retirement anyway!!!
  • Papery | 04 Aug 2014, 10:58 AM Agree 0
    Neva gunna happen....
  • Paul Sheedy | 06 Aug 2014, 04:32 PM Agree 0
    This idea does have some merit. I think a few of the comments are "off the planet". It should not replace the deposit, but be in addition to the deposit. It also should not be limited to first home buyers, but only one withdrawal allowed. Assuming the funds withdrawn should be contributed back over time say 10 - 15 years, then there would not be a major impact on retirement funds, if you needed to retire by the age of 67 or whatever it turns out to be. I guess you would have to put a cap on the age for eligibility purposes. If you purchased at 50 yrs for example, then it would have a significant impact. The scheme would require a lot of work however & be difficult to administer. Remember you can claim "hardship" for withdrawals from super today, perhaps it could work along similar lines?
  • Steve McClure | 07 Aug 2014, 01:51 PM Agree 0
    Paul Sheedy, you are right, its does have merit appropriately placed. But, before going down this path, the FHOG's as they stand should be reviewed. Allow FHB's to rent their property from the outset, stretch it across new & non-new, but reduce the $ amount. The FHOG at one stage was ridiculous, $25,000 + SD concessions. It was structured that way to boost construction and that's now achieved. Gov't could consider interest free loans rather than grants (gifts from public money).

    The FP industry will protest diminution of super, it will be a long & hard battle to implement. So, lets do something that is quicker and better.

    I submitted a lot of these suggestions in writing to senator Xenophon, but he has not replied.
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