Prime Minister Scott Morrison says unlocking superannuation for first home buyers trying to purchase a house would have a "marginal" impact on prices, after one of his ministers admitted that they would rise under the scheme.
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The Coalition's plan attempting to help people into the housing market has received wide criticism from Labor and experts saying it will put home ownership further out of reach by driving up prices while only helping higher-income people to buy a home.
The Coalition's Superannuation Minister, Jane Hume, this morning admitted house prices would rise in the short term under its plan to let first home buyers use super to purchase a property.
"I would imagine that there would be a lot of people that bring forward their decision to buy a house. So I would imagine in the short term you might see a bump in house prices," she told ABC radio.
The scheme taken with other Coalition housing policies - including a policy encouraging empty-nesters to downsize their homes and free up supply - would only have a small effect on prices, he said.
"So when taken together, and when you look at the proportion of first home buyers of the entire real estate market, it's quite marginal," Mr Morrison said.
"I simply just don't agree with the assertion that this would have a negative impact, because you have to look at the balance of policies that this is addressing.
"It deals with supply and it deals with demand and the same criticisms have been levelled at every single housing policy I have been bringing forward, and on every occasion they have proved to be wrong on those criticisms. So I'm not about now to go and give them currency."
Earlier, Mr Morrison said the scheme was "balanced" and "responsible", and would minimise any potential impact on house prices.
The Super Home Buyer Scheme would start in July 2023 and the Coalition says it would reduce the time taken to save a deposit by an average of three years.
The maximum amount that would be invested under the plan would be the lower of $50,000 for each individual or 40 per cent of their total superannuation balance.
There would be no income or property caps, and eligibility would be restricted to first home buyers who had already separately saved a 5 per cent deposit.
Labor has blasted the scheme, saying it would only drive prices up further and lock more people out of the property market.
Labor leader Anthony Albanese said the government plan would cut people's superannuation.
"The government in its desperation has come up with a thought bubble yesterday, that according to itself has not been modelled - they have no idea what the impact will be," he said.
Independent economist Saul Eslake said the Coalition's housing policy would drive up prices and could disadvantage first home buyers in the long term.
"If people use the super as the deposit to get a bigger mortgage, they may end up paying more in interest than they would have done if they hadn't taken up this scheme, because they end up buying a bigger house, or as I suspect is likely, paying more for a house than they would have done had they not actually had access to these additional financial resources," he said.
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Australian Council of Social Service chief executive Cassandra Goldie said the Coalition's planned scheme was poor policy and joined others in making home ownership less affordable for people on low and modest incomes, including negative gearing and capital gains tax concessions.
"For many years, governments have rejected proposals to allow people to use super for home deposits because they knew it would only inflate prices and make matters worse," Dr Goldie said.
Property analysts CoreLogic said the government's policy had some merit, but also downsides in stimulating more housing demand and creating inequities in accessing home ownership for lower income households who may not have large superannuation savings.
CoreLogic Head of Australian Research Eliza Owen said allowing first homebuyers to access superannuation for upfront housing costs on a broad basis would add to demand, and could increase the cost of housing.
"For first homebuyers it could erode some of the benefit of dipping into their super," she said.
"It is a very challenging time to be incentivising more housing demand in the face of supply-side constraints.
"The actual value that could be accessed through this scheme is relatively low for the typical young first homebuyer."
Mr Morrison is making the Coalition's housing pitch a direct retort to the shared equity scheme announced at Labor's campaign launch, framing the different policies as competing visions of government.
Labor has pledged its own scheme to lower barriers into the housing market for home buyers, called "Help to Buy", involving a shared equity arrangement where up to 40 per cent of the dwelling value is purchased by the federal government.
The Coalition's scheme rapidly drew fire from former Labor prime minister Paul Keating, who said the plan was an assault on the superannuation system.
Mr Morrison also used the campaign launch to announce a new policy designed to entice empty-nesters to downsize and free up larger homes for young families.
The Coalition would grow the program by expanding eligibility from July to people aged 55 and over.