Last night, a journalist dismissed host Waleed Ali’s endorsement of one of the prime minister’s most controversial policies, but the Network 10 star may be right.
Prime Minister Scott Morrison’s plan to let early homebuyers unlock their super to buy a home may be a futile last-ditch effort to win the election, but at least it’s getting some support.
The Prime Minister’s controversial policy statement allowing Australians to use up to $50,000 of their old-age pension was criticized as a stunt by Labor.
But according to Project presenter Walid Ali, this has its merits.
Speaking about the idea on the Monday night show, Ali said it should be seen as a smart investment. He said it makes sense to use a person’s superfund to invest in the “real estate market”, as opposed to what many superfunds do – invest on behalf of a person in stocks.
“Ten years ago, I would have preferred to invest my money in housing rather than the stock market,” he said.
But the comment was quickly shut down by guest Shane Wright, an economics journalist for the Nine newspaper.
“That’s why you’re a TV presenter and not in real estate,” Wright replied.
Co-host Ali joined the conversation: “That’s why you’re not an economist or a real estate agent,” he said. Support for Ali’s plan is based on the idea that the housing market has outperformed equities.
“One thing that’s interesting about this policy is that if you take your money to spend on a house and you sell that house, you have to pay back the money with an appropriate share of the capital gain,” he said.
“So, if you think about it this way, could you look at it as another investment, instead of putting money away for old age, which is invested in the stock market, it is invested in the real estate market.
“So it’s the same as stocks, except you can live off your investment, but you don’t throw away your money, you don’t lose your investment.”
Ali said that “the stock market is probably less reliable than housing,” but Wright corrected him.
“If you are retired with a growth fund, you have earned 9.5% in the last 10 years. You outperformed the real estate market by about $200,000,” he said.
“People think house prices never fall. We’re actually going through this right now.”
The question of what is better – a super or a house – was investigated by economists.
Australian The newspaper cited the numbers and said it was “a super win by 0.5 percent.”
“That’s assuming future super profits are as good in the future as they were in the past,” the paper wrote. Welfare editor James Kirby wrote on Tuesday..
Steve Mickenbecker of the research group Canstar told the paper: “It’s so close you can’t call it, using your super money to fund your home will depend on the person and their assessment of the deal.”
Ray White’s chief economist Nerida Conisby was more strident. She told ABC that it was a bad idea.
“Using an old-age pension from the start of a person’s life cycle for a home can also result in much lower retirement income, especially if the family home cannot be easily sold to reduce its size, or if its value does not increase as desired,” she said. she is.
“Having to return most of the capital to the government at this stage, or going back to retirement age, will make it harder for early home buyers to get into their next homes.”
The Prime Minister’s announcement at the campaign launch in Brisbane on Sunday will allow Australians to access 40 per cent of their super resource by July 1, 2023.
“Under the Super Home Buyer Scheme, first home buyers will be able to invest up to 40 percent of their retirement age, up to a maximum of $50,000, to help with the purchase of their first home,” Mr. Morrison said.
There are no income or asset limits in the scheme, and eligibility is limited to first-time homebuyers who must separately accumulate 5 percent of the deposit.
The proposal was first put forward when Mr Morrison was Treasurer and championed by Housing Minister Michael Succar, but was vetoed by former Prime Minister Malcolm Turnbull.
It was also championed by Liberal MP Tim Wilson as part of a “house first, super later” policy.
For many under 30, the scheme will wipe out their super savings, but for older workers who don’t buy a house until age 40, it will have less of an impact.