First Home Owners – Use your super to buy your home

First Home Owners – Use your super to buy your home

In one of our previous blogs we talked about the impending release of the intergenerational report and the discussions that are likely to be entered into surrounding housing affordability.
The first discussion is the effectiveness in allowing first homebuyers to access their superannuation for a home deposit. In our blog we look at some of the pros and cons of this policy becoming a reality.


  • As an apprentice bricklayer, I made minimal extra contributions towards my super as the government was matching my contribution at the time. However, this was more due to my boss at the time saying I would be stupid not to make extra contributions as opposed to a concerted effort to increase my super fund. It is not until the last few months that I am beginning to regularly assess my super, and I would say that not many young people would monitor their super on a regular basis. This would change if the goal of accessing super for a home deposit were introduced.
  • The ability for first homebuyers to reduce the LVR (Loan-to-Value Ratio) of their home loan, and as such minimise the cost of LMI (Lenders Mortgage Insurance).
  • First homebuyers are able to get off the rental treadmill earlier and reap the rewards of capital growth.


  • The implementation of this policy would introduce more buyers to a market with increased land supply issues.


It is great that discussions have begun in addressing housing affordability for first homebuyers. However, policies to ensure that supply is kept up with demand is considered crucial in addressing this problem, and care must be taken before any policies are implemented that may increase demand for housing.

Demand issues have decreased as of late in comparison to 2014. The number of loans to owner occupiers for the construction and purchase of new homes declined by 5.3 per cent and the number of loans to owner occupiers buying established homes, excluding refinancing, fell by 7.9 per cent, in comparison to January 2014 when assessing January 2015’s loan approval figures.

We believe this decline is partially due to the Australian Prudential Regulatory Authority’s December letter to lending institutions outlining their intention to increase the level of supervisory oversight of mortgage lending. The letter detailed some specific areas of concern noting high LVR loans, fast growth in lending to investors, and mortgage affordability in a (future) higher interest rate environment. It remains to be seen if this has a long-term impact of lending from financial institutions. However, demographical data supports increased future demand in housing, so we believe that any perceived ‘credit squeeze’ will only represent a short term problem when evaluating Australian housing growth figures.

Author: Lewis Flatt – Cap-It-All Building Inspections, servicing the Perth Metro Area

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