Findings of new research on young Australians has shown that 33% of Australians aged between 18 and 34 are willing to think outside of the box by using their superannuation for a home deposit.
The survey, which was commissioned by loan bidding platform LoanDolphin, polled around 1,000 individuals across Australia and found that amongst those between 25 and 34, nearly 60% wanted to use their super to purchase property.
“The research shows that Millennials are really looking for different ways to save for a home deposit in a very hot property market,” said LoanDolphin CEO Ranin Mendis.
With the median cost of housing hitting $800,000, these results were not surprising, he added.
Mendis called upon the Australian government to look overseas for inspiration about how to help young people enter the property market.
“Young Australians have a right to buy their first home and the government should consider widening all options – it may be worth taking a look at what other countries are doing in this regard,” he said.
He cited Malaysia as an example where individuals can withdraw up to 30% of their pension for loan or monthly repayments. Over in Canada, he pointed at the Home Buyer’s Plan (HBP) which allows people to withdraw up to $25,000 per year from their registered retirement savings plans (RRSP) to buy or build a qualifying home.
Mendis urged the government to look into these options and work towards a long-term view which is beneficial to all Australians (young and old) who have the income and some savings but who are unable to get into property.
“If Millennials could use a portion of their superannuation for a deposit, it may help more young people to start building their wealth via investment in the property market.”
When asked whether there was some risk in using super to buy a home, Mendis said that unless the super was invested in cash, one was always betting on the asset class not to lose value anyway.
“The survey merely shows the appetite or sentiment from Millennials perspective to have a solid solution towards their dilemma when it comes to realising their dream of owning a property,” he told Australian Broker
The survey also looked at differences across gender and geography for those between 18 and 34 years old. For males, nearly 35% would opt to use their super to buy a property while 27% of females would do the same.
Across the different states, the survey revealed the following percentages of young Australians willing to tap into their super for a home deposit:
- NSW (34.5%)
- Victoria (29.4%)
- Queensland (29.1%)
- South Australia (32.1%)
- Northern Territory (53.3%)
- Western Australia (29.0%)
- Tasmania (18.2%)
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