The petition has been organised by Melbourne woman Tegan DeClark, who said that in the face of skyrocketing rents and the rising cost of living, many Australians are unable to save enough for a home deposit, locking them into a long-term rental cycle.
“The petition proposes a solution to this growing housing affordability crisis: allowing individuals to become tenants in homes owned by their superannuation funds,” she said.
“I have had over 15 years in real estate, including during the GFC in the USA, where I saw the housing market collapse. I know a lot of successful Millennials and Gen X people with families to support. They have a healthy wage [and] healthy super balance but have highly indexed HECS debts, rents and cost of living and are struggling to save enough for a deposit in metro areas and some regional areas. They are trapped and are unable to buy a home [that] is suitable for families and pets and supporting aging parents.
“It’s very challenging when you need just shy of $200,000 for the average deposit on a house and $126,700 average deposit for a unit in metro areas. While others I know have only been able to buy due to their parents giving them money for a deposit, or getting an inheritance, those who don’t have family wealth, most will continue to be unable to grow their personal wealth beyond their wage rises, which are not keeping up with the cost of living and housing prices.”
In a recent Newspoll survey, housing emerged as the most dominant cost-of-living worry for Australian voters. The poll revealed that housing ranked highest with 40 per cent of participants, far ahead of groceries (25 per cent), energy bills (18 per cent), and insurance (11 per cent).
At the recent Class Annual Benchmark Report launch, Class general manager Kate Anderson said most people are setting up an SMSF to invest in property.
She said Millennials living in capital cities will lead the charge into SMSFs because they have a large balance in their super fund, and it will take them too long to save outside super for a deposit where they live. Instead, they would rather set up an SMSF and enter into a limited recourse borrowing arrangement.
Additionally, the Coalition has released a policy proposal that would allow up to $50,000 of any super contributions to be withdrawn to buy a first home.
However, an independent report from economist Saul Eslake found the Coalition’s scheme would likely “hinder home ownership aspirations for younger Australians” by allowing individuals to withdraw up to 40 per cent or $50,000 (whichever is less) to put towards purchasing a property as owner-occupier.
Eslake said the proposal would also increase house prices, lower retirement incomes and lead to ballooning budget costs. According to the report, 78 per cent of single Australians aged from 25 to 34 years old would be unable to withdraw more than $20,000 as part of the scheme.
DeClark said that with generations of Australians struggling under the weight of an increasingly unaffordable housing market, there is a need to explore new options to help renters break free from the rental cycle and move towards home ownership.
“Letting people use their superannuation to invest in their future homes could be a game changer for so many. Under current regulations, SMSFs can be used to purchase commercial properties for businesses or investment properties but not for residential properties intended for personal use,” she said.
“The petition argues that expanding SMSF rules to include primary residences would offer a lifeline to those who cannot save enough for a deposit while paying ever-increasing rents and managing the rising cost of living, as wages fail to keep up.
“If current renters were able to use their superannuation to purchase residential property, they could pay market-value rents to their superfund for the use of the property, offering stability and security, and removing the risk of rental stress and eviction.”
The online petition will run until 10 October and can be signed at https://www.aph.gov.au/e-petitions/petition/EN6601.
