GLASS PYRAMID ‘EXCLUSIVE’ SEALED SECTION CONTENT
In a strange article, the usually pretty reliable Peter Martin, gives Joe a break over the plan that has been floated, and to varying degrees supported by Mr Hockey, to allow home buyers to access some of their super to buy their dream.
Mr Martin says it is a good idea because private home ownership is a good thing (and it is). He even goes so far as to state
“Home ownership was once an article of faith of the Coalition. Hockey has at least shown an interest in getting it back on track.”
Mr Martin says that such a scheme would work if competition among buyers was reduced.
The best way to hold down prices for first-home buyers is to take out the competition. Second and third home buyers (so called “investors”) now almost outnumber owner-occupiers at auctions. One out of every seven Australian taxpayers is a landlord.
The problem is that Mr Hockey has given no indication that he is going to try to reduce in any way the demand for existing housing from investors pursuing a negative gearing strategy. Not even as little as try to channel the strategy towards new housing only – where arguably its claim to add to housing supply could be demonstrated.
Although to his credit Mr Hockey has confirmed on several occasions that the government is going to get tough with foreign investors breaking the law, by buying existing residential housing, so at least he is making some sounds about reducing some of the competition for existing houses. (But of course let’s wait and see how that New Improved FIRB pans out as seeing is believing when it comes to governments taking action against foreign investors buying existing housing or temporary residents who do not divest their purchases of existing houses on departing the country. The ALP were useless in this regard and Ed Husic is still moaning on behalf of foreign investors and other non-citizens)
If we had functional housing and land markets where there was a plentiful supply of new land for housing and governments at all levels were not seeking to gouge as much as possible from new home buyers, while stoking investor demand for existing housing with poorly targeted capital gains and negative gearing policy, then the idea of allowing people to put some of their super into housing might be a good idea.
But we are nowhere near that state of affairs, with the housing market more mutant than ever, and until then praise for Mr Hockey for floating the idea of ‘unlocking’ super for housing is unwarranted as currently it is nothing more than a thought bubble idea that would throw more fuel on the rampant housing investment ponzi.
Mr Martin is correct about housing once being an article of faith for the coalition. Sadly that is not the only article of faith that the coalition has discarded over the last 20 years.