Why This Matters Now
If you’ve been following the news, you’ve probably noticed that buying a home in Australia is getting tougher by the year. Prices keep climbing, deposits are daunting, and for many, that “Great Australian Dream” of home ownership is slipping out of reach.
One idea taken to the 2025 federal election by the Coalition was letting first-home buyers tap their super for a deposit. The Coalition lost, but the idea keeps coming back. It's different from the existing First Home Super Saver Scheme, which already lets you withdraw up to $50,000 of voluntary contributions you've made to super.
On paper, it sounds like a lifeline for cash-strapped hopefuls trying to scrape together enough for a deposit. But here’s the thing—this move isn’t as simple as it sounds.
In March 2025, Professor Chris Leishman from the University of South Australia modelled the idea in a report commissioned by the Super Members Council. He crunched the numbers to see what would happen if thousands of would-be homeowners suddenly had bigger deposits. *Spoiler alert: prices go up.*
Here's what the report found, who could benefit (and who might not), and what it could mean for the property market. No jargon, just the facts and some real-world context.
A Brief Look At First Homeowner Policies
First, a bit of history. Australia's no stranger to giving first-home buyers a leg up, and the best-known scheme is the First Home Owner Grant (FHOG).
Introduced in July 2000, alongside the GST, the FHOG was a $7,000 cash grant.
It was meant to offset the GST's impact on home prices. Instead, research shows it mostly got baked into prices. Sellers knew buyers had extra money, so prices went up.
It’s not just an Aussie thing, either. Take Bavaria in Germany, where a more generous first-home grant also pushed prices up. Or the UK’s Help to Buy scheme, which made prices soar in places with tight housing supply—like Greater London—but didn’t do much in areas where housing was already more affordable.
And these policies don’t always help the people they’re meant to help. Studies here in Australia found that the FHOG mainly helped people who were already close to buying a home. It didn’t do much for those stuck further back from the home ownership starting line. Plus, most grants ended up going toward buying existing homes rather than boosting new construction.
That's a problem *because it doesn't add to housing supply*. It just stirs the pot and pushes prices higher.
The Super for a House Proposal—What It Involves
Now, let’s talk about the proposal at the heart of this discussion: using your superannuation savings as a house deposit.
Here’s how it’s supposed to work:
Under the proposed policy, first-home buyers could use their super—up to $50,000 or 40% of their balance (whichever is lower)—to help cover a home deposit.
Sounds like a decent chunk of change to get you across the line, right? The idea is that by freeing up those funds, more people can get into the market faster.
But there are some important assumptions baked into this. For one, the report assumes these buyers would still need to borrow 90% of the home’s value (loan-to-value ratio), because tapping into super just boosts the deposit—it doesn’t replace the need for a mortgage. And in most cases, the people this policy is aimed at aren’t buying million-dollar homes.
We’re talking about folks trying to scrape together enough for an entry-level property, whether it’s at the median price in their area or at the lower quartile of the market.
Plus, it’s worth noting this isn’t just for singles. If you’re partnered, the combined household can pool super withdrawals under the same limits. It means more buying power for couples who’ve got decent super balances between them.
Sounds like a win for home buyers, right? But there's a flip side to all that extra buying power.
What the Data Tells Us—HILDA and Home Ownership Transition
Alright, so the proposal says:
“Let people use their super for deposits, and we’ll see more first-home buyers getting into the market.”
But how many people are we actually talking about?
That’s where the HILDA survey (Household Income and Labour Dynamics in Australia) comes in. It’s one of the most detailed studies of Australian households, tracking things like income, savings, relationships, and—you guessed it—home ownership status. The report used HILDA data to figure out how many non-homeowners might jump into the market if they could tap into their super for a deposit.
Here’s what it found: if the policy were in place, around 130,000 to 148,500 additional people could buy a home in just the first year. That’s a huge influx of new buyers!
These are people who couldn’t quite scrape together a deposit, but with access to their super savings, suddenly they’re in the game.
The data also shows that it’s not just about how much money you’ve got—it’s about life changes, too. Getting a partner or having kids can bump up the chances of becoming a homeowner. And the HILDA data suggests that income plays a role, but only to a point. Higher income makes it easier to buy, but once you’re above a certain threshold, that advantage levels off.
One key finding? Having a deposit saved—whether it’s cash or super—makes a massive difference. According to the data, people with savings worth at least 10% of the median house price in their area are far more likely to take the leap into home ownership. So, letting people unlock that deposit from their super could shift a lot of “almost there” buyers into the market.
Two Economic Models—Forecasting the Price Effects
So far, we’ve talked about how letting people use their super could help them get into the housing market. But what happens to the market itself?
Wouldn’t a sudden influx of buyers push prices up?
That’s exactly what the report set out to answer, using two different economic models to forecast the likely impact. Here’s what they found.
The first model, based on a long-running international study (by Adams & Füss), looks at how house prices respond to things like interest rates, bank lending and construction costs. It suggests that after two years, prices could be up to about 10.3% higher than without the policy.
The second model (from Fry et al.) uses recent Australian data and focuses more on bank lending. It predicts a slightly smaller but still significant rise of 7.4% to 8.1%.
Why the difference? Well, the first model uses a broader, longer-term international dataset, while the second sticks to more recent Australian figures.
But both point in the same direction: if demand surges without matching supply, prices will rise.
Put that in context. If you already own a home, rising prices might sound great. But if you're a first-home buyer, the policy meant to help you could make buying harder.
The Bigger Picture—Supply, Demand, and Affordability
Let’s zoom out for a second. Allowing people to use their super for deposits might get more buyers into the market, but what about supply?
That’s where things get tricky. The report makes it clear:
If you boost demand without increasing supply—or reducing demand from elsewhere—prices are bound to rise. It’s classic supply and demand.
More buyers competing for the same number of homes means higher prices.
And here’s the catch: the policy mainly helps people who are already close to buying a home. Those who are further behind—maybe saving slowly, or stuck renting—might find the gap widens even more. If you’re a renter or a low-income household, this policy doesn’t do much to help. In fact, it could push prices higher and make it even tougher to catch up.
Adding to the problem, most of the homes bought with these super-boosted deposits are likely to be existing properties, not new builds. That means no increase in housing supply, just more competition for what’s already out there.
The result? Price hikes without the benefits of more homes.
This isn’t just theory, either. We’ve seen it before with grants like the FHOG and Help to Buy. Without strong supply-side policies—like incentives for new construction or relaxed planning restrictions—these demand boosts don’t solve affordability issues. They just move the goalposts.
What This Means If You're Building in Queensland
Demand boosts like this mostly flow into established homes. If you're building new, you'd feel it mainly through higher land prices, as more buyers compete for the same lots in new estates. That's money that goes on the block, not into the quality of the house you build on it.
Report Biases, Gaps, and What’s Missing
Every report has its limits, and this one's no exception. It's also worth knowing it was commissioned by the Super Members Council, which represents industry super funds that opposed the policy. The modelling stands on its own, but keep the source in mind.
First, it focuses mainly on the demand side of the housing equation—how many more people could buy a home if they could access their super. What it doesn’t really address is the supply side. How many new homes would be built in response to increased demand? If supply doesn’t increase, prices will. And let’s be honest, in many parts of Australia, building new homes is easier said than done.
Second, the models used are based on historical data—either long-term international data or more recent Australian numbers. While these models give us a good sense of trends, they can’t predict exactly how future buyers, builders, and policymakers will react. Economic forecasts are helpful, but they’re not crystal balls.
There’s also the question of whether the models account for changes in other parts of the economy—like interest rates, inflation, or broader financial pressures. The real world doesn’t happen in a vacuum, and housing markets are influenced by a whole web of factors.
Lastly, the report doesn’t look into the long-term consequences. What happens to people’s retirement savings if they raid their super for a house deposit? Could this policy leave future retirees with less money down the track? These questions deserve more attention and discussion.
Key Takeaways From The Report
The idea of using your super for a house deposit sounds like it could help a lot of people get into the market. And for many, it might just do that.
But the report’s findings are clear: if a lot more buyers flood the market and we don’t build more homes to keep up, prices are going to climb. We’re talking 7.4% to 10.3% higher house prices in just two years—on top of whatever price increases we’re already seeing.
Who benefits most? Likely, those already close to buying. People with enough super saved and an eye on a first home might finally jump in.
But for everyone else—especially renters or lower-income earners—the dream of home ownership could get even harder to reach as prices go up.
And let’s not forget about long-term consequences. Taking money out of super to buy a house now might leave some with less in retirement. It’s a trade-off that needs careful thought and further discussion.
Frequently Asked Questions (FAQ)
1. What is the "super for a house" proposal?
A Coalition election proposal that would have let first-home buyers use the lesser of $50,000 or 40% of their super balance as a house deposit.
2. How much could I have withdrawn?
The lesser of $50,000 or 40% of your super balance. So with $100,000 in super, you could access up to $40,000.
3. Would it make it easier for first-time buyers to get into the market?
For some, especially those already close to buying. But it would likely make homes more expensive overall, leaving others further behind.
4. How might it affect prices in different regions?
Areas with tight supply and high demand, like the capital cities, would probably see the biggest price jumps. Areas with more housing available might feel less impact.
5. Would it affect retirement savings?
Yes. Taking super out early means less money in retirement, unless you make it up later.
6. How does it compare with the FHOG or Help to Buy?
It's similar: it boosts demand without adding supply, which usually leads to higher prices. The difference is that it uses your own super rather than a government grant or subsidy.
Further Reading
Modern Housing Techniques: Key Findings from 1974The 1974 Task Force report on industrialised housing—unpacking the wins, the misses, and what today’s builders and homeowners can still learn from it.
Superannuation vs. Boomer Bonds: Comparing StrategiesExplore the pros and cons of two proposed strategies to address Australia’s housing affordability crisis: allowing access to superannuation funds for housing and the introduction of Boomer Bonds.
Australia’s 2025 Land & Housing Crisis ExplainedThe 2025 State of the Lamb report reveals a worsening housing shortage, record land prices, and construction delays. Here’s what it means for everyday Australians trying to enter the housing market or build a new home.
Addressing Australia’s Housing Affordability CrisisThis article looks into the root causes of the housing affordability crisis in Australia, highlighting demographic changes, supply shortages, and potential policy solutions to make housing more accessible.
Government’s Role in Australia’s Housing MarketIn this article we discuss a position on the possible reasons behind the government’s reluctance to implement substantial housing reforms.
