[toda67]

The idea of using super for housing is a poor choice. Long gone are the days when investing in a house was easier. It was the Australian dream where both investors and first home buyers wanted to get into the market because of the idea it was a secure investment. For many families they had 2 incomes and that assured them of saving for the deposit and affording the interest and principal of their loan. Stretching their borrowing was achievable. It also was one reason house prices doubled in less than 8 yrs. This isn't achievable currently as the first-time buyers require 20% deposit, reducing the percentage of buyers in the market. Currently, an average person can't afford to service a loan by themselves in any capital city.
With super, if working, your employer deposits 12% of your wages. You can increase that amount by salary sacrificing up to the level of $30K each year. This reduces tax for most taxpayers. The annual returns for balanced funds are at least 7% over the long term. It is like investing without having to think about it, bar if your super fund gives you returns higher than inflation. By taking money out of super the returns will be smaller.
What the past has suggested since super has been compulsory is the average Baby Boomer (who has had a longer time saving for their future) has saved less in super to afford a comfortable retirement. Their asset, of a house, is not liquid hence borrowing is the quickest solution. Homes require maintenance. Each factor reduces their disposable income. Interest rates on borrowing will always be higher than bank savings.

 

[Fozz]

Superannuation is what its designed for, less reliant on the government pension with money to enjoy the later years of life. People will not save for themselves that's why Super should not be allowed to be touched. The Government are bringing in 1 million people a year at the moment via there immigration program. Infrastructure is falling behind big time. Energy costs through the roof and going up with the Governments continuation of net zero. Manufacturing closing in large numbers with company CEO'S sending out huge warnings and a housing shortage that's not going to change in the short term. Until Australia starts looking after it's own back yard the rent and the house prices are going to get higher.

The quota for permanent migration is 185,000 for this year. The majority of places are for skilled migrants. There will probably be 250,000 temporary migrants such as students and specialised workers. There was a huge backlog from the covid years which is slowly flattening out. The high number of foreign students keeps our universities viable (although that is becoming doubtful) as government funding has decreased over the past 4 decades. Parts of Sydney where there are 60 foot frontages, which were the old minimum, are being converted to duplex blocks. which is increasing housing supply but the biggest problem is the shortage of tradesmen. We should be targeting countries such as Poland, Lithuania and Germany for tradesmen. They are highly skilled and hard workers. I have a brother in the UK who employed a team: the foreman was a trained and licenced carpenter, plumber and electrician. Hi men were all trained and licenced. Brexit forced them to leave and he had to employ English workers who wanted high pay for low productivity.

 

[BabsL]

12% of income during working years is now going to superannuation. No wonder people can't afford a home. The current rules are thoroughly stupid. Everyone should be able to use their super (if they can show need) to acquire a very modest first home or a home to replace one lost in a crisis or trauma - potentially borrowing from their own super with a requirement to repay the fund down the track if their financial situation permits.

The argument that super is for retirement does not stack up when you consider that a home of one's own is a far better asset than extra super in retirement. If couples could put a deposit on a home, they would be paying off an asset instead of lining a landlord's pockets. Over time, as rents rise, repayments and costs of ownership would reduce as a percentage of income, allowing for higher contributions to super. Eventually, the house would be paid off and there would be no rent to pay in retirement. Even a few hundred thousand less in super would not matter (though it's likely many would end up with just as much super thanks to the benefit of not paying rent for decades). The house would likely be worth many, many times its cost and could be downsized or a reverse mortgage taken to supplement super income if necessary.

People with significant super and no home might well spend their super on a house at retirement, paying 10+ times what it would have cost them earlier in life and blowing much of their super. How does that make any sense.

I struggle to understand the ridiculous logic behind the current laws, but I guess they are driving us toward the 'you will own nothing and be happy' goal conspiracy theorists put forward.

Thankfully, I own my home. I was conditioned, from a very early age, to believe home ownership was the first and most important financial priority in life and every cent I could manage should go towards it until that goal was achieved .

I agree, to a certain extent.
Early use of Superannuation to be agreed provided the total amount being borrowed to purchase a home is purely and solely for their own residential occupancy, and to be resided in by them for not less than ten years, that should one (or both persons) cease working for ANY reason whatsoever, that mortgage repayment can be easily met on one wage WITHOUT attempting to re-mortgage or take out another loan, AND that no other debts are taken on or accrued for unnecessary frivolous reasons like holidays, and that their credit card debt never exceeds $10,000. Basically, no use of Super is permitted to take on a mortgage they cannot easily repay.

AND ….. every person applying for a mortgage by using their Superannuation MUST attend classes run by the bank, a govt department, or an educational facility on “WHAT A MORTGAGE MEANS” to teach them about the debt they want to take on, the delightful extras that occur once you sign that mortgage document like Water Rates, Council Rates Land Tax, Maintenance, Owners Corporation fees & levies, etc. Teach them what occurs when they default, and what spending their Superannuation will mean in the long run.
Force their eyes open, bcz most have little idea of their responsibilities.

It may sound harsh to the gullible spenders of today, but this is how the majority of Boomers paid off their homes:
We stayed at home, did not take holidays, did not go to restaurants, no new shoes, bags, dresses, no weekly “drinkies w the girls”, not even going to the Pictures, and we certainly did not put things on Hire Purchase. Everyone knew that Hire Purchase was the road to Ruin. No expensive hobbies allowed either.
Our sole priority was to work to pay off that mortgage as fast and steadily as possible. Our own parents taught us that simple fact of life, and most of us learned it well.
If you cannot afford it, DO NOT BUY IT!

 

[maggiej]

Sorry, but you are incorrect.

"Superannuation's introduction in Australia in 1992, the Superannuation Guarantee (SG),was a significant policy shift where employers were legally required to contribute a percentage of their employees' wages into a retirement fund. This compulsory system arose from a deal between the Australian Council of Trade Unions (ACTU) and the Hawke government to exchange lower initial pay rises for the promise of universal superannuation, which was seen as a way to provide income in retirement for all workers. The SG was enacted by the Superannuation Guarantee (Administration) Act 1992 and has gradually increased from an initial rate of 3% to the current 12%."

Note the words 'deal between.... to exchange lower initial pay rises....

Furthermore, plain common sense says if you pay more into one basket you can't pay as much into the other. No matter what unions do, employers have only $X dollars to pay employees and the more they put into super the less they have left to pay in direct wages. I agree that unions constantly push for higher wages, and that certainly leads to higher costs. But employers can't just put prices up every time their costs increase. That results in push back from buyers. Some employers have more scope to put prices up than others, but there are limits. Ultimately, they have to manage their outgoings, and that means paying less in wages if they pay more in super. That's just plain common sense - and Economics 101.

I agree as I remember that the super was to be paid instead of a wage increase. My husband in his job did not have any super until very late in his life. We had managed to pay off our home then selling and buying a larger home. I am very careful with our finances and we rarely had any form of holiday or extra luxuries. However he did in later employment have super and worked until he was 80 and then only retired due to health reasons. His later employer paid super and we were able to enjoy holidays.

 

[cblayney]

I totally agree with a lot you said.
Through hard work and saving I have owned my own home since my late 40s.

The only statement that most people seem to forget is that the 12% superannuation is being paid by their employers, not them.
I was in business when superannuation was first considered.
I quickly realised that as a "small" business owner I could not possibly afford, or pass on, this additional increase in myemployees wages and had to close down my business.
Yes, I realise that it appears to the workers that this money is coming out of their salary, but that is not so. Every time super goes up it does not come out of your salary,but is an extra cost to your employer.
This super was bought in to fund retirement, not for the boss to contribute to their employees ability to be able to buy a home.
How this generation is going to afford a home is beyond me.
Our generation were happy to start off with an older, smaller home. Hang sheets on the windows.buy 2nd hand furniture, drive an old jalopy. Even work two or three jobs.
Unfortunately a large percentage of today's young want to start off where their parents have finished.
Nothing smaller than a 4x2, theatre room, very minimum 2 bathrooms, a powder room, butlers pantry, pool.
They are in debt for expensive cars, mobile phones, computers, internet costs, streaming services.
All these things are viewed as necessities.
Until they can learn to differentiate between their needs and their wants nothing will change.
House prices are way too high with not much likelihood of them coming down any time soon.
They need to start building more 3x1 basic modular homes for young couples, who need to lower their expectations and gradually build up to their dream home as previous generations did.
And leave their superannuation alone, because, as we all know, they are going to need it one day.

I absolutely agree with everything you have said. Well done

 

[marni]

I totally agree with a lot you said.
Through hard work and saving I have owned my own home since my late 40s.

The only statement that most people seem to forget is that the 12% superannuation is being paid by their employers, not them.
I was in business when superannuation was first considered.
I quickly realised that as a "small" business owner I could not possibly afford, or pass on, this additional increase in myemployees wages and had to close down my business.
Yes, I realise that it appears to the workers that this money is coming out of their salary, but that is not so. Every time super goes up it does not come out of your salary,but is an extra cost to your employer.
This super was bought in to fund retirement, not for the boss to contribute to their employees ability to be able to buy a home.
How this generation is going to afford a home is beyond me.
Our generation were happy to start off with an older, smaller home. Hang sheets on the windows.buy 2nd hand furniture, drive an old jalopy. Even work two or three jobs.
Unfortunately a large percentage of today's young want to start off where their parents have finished.
Nothing smaller than a 4x2, theatre room, very minimum 2 bathrooms, a powder room, butlers pantry, pool.
They are in debt for expensive cars, mobile phones, computers, internet costs, streaming services.
All these things are viewed as necessities.
Until they can learn to differentiate between their needs and their wants nothing will change.
House prices are way too high with not much likelihood of them coming down any time soon.
They need to start building more 3x1 basic modular homes for young couples, who need to lower their expectations and gradually build up to their dream home as previous generations did.
And leave their superannuation alone, because, as we all know, they are going to need it one day.

So agree. Superannuation was so people would not rely on the pension. Or at least only those that never worked or paid tax would get a pension

 

[Catherines]

And how about the hundreds and millions of dollars being paid to the CEOs of companies? Do they really need to get these BIG incentive wages EVERY YEAR not just as a bonus? If their wages were halved then companies would be able to put that money away as profit and employees would not keep WANTING this four day week rubbish. Work for your wages, CEOs stop getting those absurd wages and yearly bonuses, then employers would be able to employ more people and we wouldn’t have to import some of the low quality stuff from abroad; we’d be able to make better quality goods at a better price here, and that would mean more jobs for more people here.

 

[Jokee]

We used to have a home mortgage but we got divorced. My child support was $1200 per month for 12 years and so at 77 still rent. To pay the rent I have to keep working. The rent is reaching a point, its gone up 25% over the past 18 months, where I need to look elsewhere, away from my family and friends. On yer Albo, keep importing more people and building less homes to accommodate them. That will ensure that I will be working into my 80s or living in the car. Cheers.

I hear you, my rent is 66% of my pension. I'm paying $100 a week below market value, so I'm lucky. However, how long that will last for is my worry.

 

[Wombat2u2004]

Superannuation is what its designed for, less reliant on the government pension with money to enjoy the later years of life. People will not save for themselves that's why Super should not be allowed to be touched. The Government are bringing in 1 million people a year at the moment via there immigration program. Infrastructure is falling behind big time. Energy costs through the roof and going up with the Governments continuation of net zero. Manufacturing closing in large numbers with company CEO'S sending out huge warnings and a housing shortage that's not going to change in the short term. Until Australia starts looking after it's own back yard the rent and the house prices are going to get higher.

Yes, mass immigration is most certainly the catalyst.

 

[RobbyNotTheRobot]

Sorry to read that post of yours mate.
Yep, the Family Law Court has left many a good man on the sh*t heap.
Just another labor party feck up.
No bloody wonder someone tried to bomb the place.

I don't know if just one party is to blame for The Family Kangaroo Court.
I knew a guy back in the 80s who hated what the Family Court did to his Father and himself, He wanted his father to have custody of him but noooo. The Family Court knew better and gave it to his drunk mother.

 

[Wombat2u2004]

I don't know if just one party is to blame for The Family Kangaroo Court.
I knew a guy back in the 80s who hated what the Family Court did to his Father and himself, He wanted his father to have custody of him but noooo. The Family Court knew better and gave it to his drunk mother.

Yep. I met a guy in Western Sydney when I was building an extension to the house of his dad. He was recently divorced from a drug addict woman who was a heroin junkie. No matter how hard he tried, he couldn't get the kids off her. The Family Law Court stood their ground against him and made him pay maintenance for the kids, but the money went up her arm. He told the Family Law Court that, but it made no difference.