Speaker 1: Hello. My name is Satasha Nabananga Bamblet. I'm a proud
Speaker 1: yor the Order Kerniye Whoalbury and a waddery woman. And
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Speaker 2: She's on the Money. She's on the Money.
Speaker 3: Hello, and welcome to She's on the Money podcast. That's
Speaker 3: helping you sort out your finances now so future you
Speaker 3: can live their best life.
Speaker 4: There's been a lot of.
Speaker 3: Chatter recently about a policy idea that could help first
Speaker 3: home buyers break into the market sooner. And if you've
Speaker 3: heard of it already, I'm sure you're thinking, Wow, VI,
Speaker 3: that sounds so great. But before we get too excited,
Speaker 3: what if I told you we don't actually have to
Speaker 3: guess how this is going to turn out. I'm Victoria
Speaker 3: Devine and today For this special bonus Saturday episode, you
Speaker 3: and I are going to look Across the Ditch to
Speaker 3: see what happened when New Zealand tried almost the exact
Speaker 3: same thing. I'm just going to spoil it for you
Speaker 3: real quick here. It didn't actually go quite as planned.
Speaker 3: But first I want you to imagine a policy that
Speaker 3: makes houses more expensive, reduces retirement savings, and increased government spending.
Speaker 4: Would you vote for it? Probably not? Well, actually, okay,
Speaker 4: we're friends.
Speaker 3: Across the Ditch introduced a scheme that let first home
Speaker 3: buyers dip into their super which is actually keyw Saver
Speaker 3: over there to buy a home, which, in theory sounds
Speaker 3: fantastic because who doesn't want to help first home buyers
Speaker 3: get into their first home quicker? But let's talk about
Speaker 3: what actually happened. Let me set I guess the scene.
Speaker 3: You're a first home buyer. You have been diligently saving
Speaker 3: every single dollar you've been topping up your retirement fund.
Speaker 3: You're super, your Key WE Saver, same same, You're going
Speaker 3: to stash away extra cash and then you're doing everything right.
Speaker 3: All of a sudden, the government says, hey, you can
Speaker 3: actually dip into your SUPER or your keyw saver.
Speaker 4: For a house deposit. You're going to go, oh, my.
Speaker 3: Goodness, this has been so hard, how good? I would
Speaker 3: absolutely love to do that, because this has been honestly
Speaker 3: a long slog, and it is getting further and further
Speaker 3: away from being reality. That three bedroom place in a
Speaker 3: really great suburb actually starts to feel a little bit
Speaker 3: more enrich But here's the catch. You're literally not the
Speaker 3: only one with this idea. There are thousands of other
Speaker 3: first home buyers who are thinking exactly the same thing,
Speaker 3: And suddenly, at every single option, everyone's budget has an
Speaker 3: extra fifty grand in it. That house it was listed
Speaker 3: at six hundred grand, well now at six hundred and
Speaker 3: fifty thousand dollars. Prices rise, competition is heating up, and
Speaker 3: you know what happens in the end, you are still
Speaker 3: locked out of the market. And am I guessing no?
Speaker 3: Because that's exactly what played out for our friends in
Speaker 3: New Zealand. After they introduced this policy, house prices started
Speaker 3: rising even faster, jumping from seven point six percent to
Speaker 3: nine point two percent per year.
Speaker 4: Buyers suddenly had more money.
Speaker 3: To spend, which in theory was a good idea, but
Speaker 3: so did their competition, so sellers just raised the prices
Speaker 3: to match with deposits Struggling to keep up, buyers had
Speaker 3: to borrow more money just to stay in the game,
Speaker 3: and the proportion of high loan to value ratio mortgages
Speaker 3: taken by first home buyers actually skyrocketed for from twenty
Speaker 3: five percent to seventy five percent since twenty fourteen. What
Speaker 3: does that actually mean. Well, people were stretching themselves really thin.
Speaker 3: They were taking on bigger mortgages relative to their deposits,
Speaker 3: leaving them vulnerable to even more financial stress if interest
Speaker 3: rates rose, or life threw in an unexpected curve ball
Speaker 3: like a job loss or maybe an emergency expense. Many
Speaker 3: had not much financial cushioning to fall back on. But
Speaker 3: you know what the hardest hit was lower income earners
Speaker 3: and renters. They couldn't access as much from Keywi saver,
Speaker 3: yet they still faced skyrocketing house prices. Meanwhile, the biggest
Speaker 3: winners they were the property investors. While first home buyers
Speaker 3: were dipping into their retirement savings just to get on
Speaker 3: the ladder, just to compete, investors sat back and they
Speaker 3: watched their property values climb higher deposits pushed prices up,
Speaker 3: making homes even more expensive and played right into the
Speaker 3: hands of those who already had multiple properties.
Speaker 4: So instead of.
Speaker 3: Leveling the playing field, this policy did the exact opposite.
Speaker 3: First home buyers were left with bigger debts, higher risks,
Speaker 3: and fewer opportunities to get into the market, all while
Speaker 3: the housing affordability crisis only got worse. And you know what,
Speaker 3: here's the wild part. If you didn't think that was wild,
Speaker 3: This policy wasn't just ineffective. It actually made home ownership
Speaker 3: rates worse. In New Zealand, home ownership of people in
Speaker 3: their thirties dropped by seven percent instead of increasing, So
Speaker 3: despite all that extra money being pumped into the market,
Speaker 3: fewer young people were actually ending up owning homes. And
Speaker 3: here's something telling. Seventy seven percent of first home buyers
Speaker 3: in New Zealand now use their super to buy a home,
Speaker 3: up from sixty five percent in twenty fifteen. That means
Speaker 3: more and more young buyers have to dip into their
Speaker 3: retirement savings just to compete in the housing market. Now,
Speaker 3: three hundred and seventy nine thousand and New Zealanders have
Speaker 3: collectively withdrawn in New Zealand dollars ten billion dollars from
Speaker 3: their retirement accounts. That's ten billion dollars not growing for
Speaker 3: their retirement and all for what to chase incredibly expensive
Speaker 3: homes in a market that's been artificially heated by the
Speaker 3: very policy meant to cool it down. Oh and did
Speaker 3: I mention that the New Zealand Treasury explicitly warned that
Speaker 3: this would happen. They literally said this scheme would stimulate
Speaker 3: demand and increase house prices. And you know what, they
Speaker 3: weren't wrong. They work very on the money. Stay with
Speaker 3: me because after the break we're going to zoom out
Speaker 3: and we're going to look at what this could actually
Speaker 3: mean for Australians, not just home buyers. Welcome back, my friends.
Speaker 3: We have been chatting about the proposal to let Australians
Speaker 3: dip into their superannuation for house deposits and why the
Speaker 3: New Zealand experience should make us stop and think. But
Speaker 3: it's not just about crisis, right, Let's talk about what
Speaker 3: happens to your suberannuation when you're not investing it optimally.
Speaker 3: Australian mysuperbalanced options achieve about seven point eight percent returns annually,
Speaker 3: compared to just six point six four percent for Keywi
Speaker 3: Saver balanced options. That difference might seem really small, but
Speaker 3: over forty years of working life it is massive. Keywi
Speaker 3: Saver funds hold sixteen point five percent less in growth
Speaker 3: assets than Australian super funds, largely because they need to
Speaker 3: keep more money accessible for these housing withdrawals. That means
Speaker 3: funds take fewer investment risks and generate lower long term
Speaker 3: returns because of this policy. This affects everyone with super
Speaker 3: not just home buyers.
Speaker 4: Right.
Speaker 3: If Australian funds had to accommodate large scale withdrawals for housing,
Speaker 3: which they might have to, they'd likely be forced into
Speaker 3: taking more conservative investment strategies to make sure that they
Speaker 3: have enough cash on hand to deal with this. That
Speaker 3: means less money invested in high growth assets and over
Speaker 3: time law returns for literally all of their members, whether
Speaker 3: you're buying a home or not. And I need you
Speaker 3: to remember, our supersystem was designed to reduce the reliance
Speaker 3: on the aged pension. Australia's pension expenditure is projected to
Speaker 3: decrease from two point five percent to two point three
Speaker 3: percent of GDP by twenty sixty. Meanwhile, new Zealand's pension
Speaker 3: costs are actually expected to increase over the same period
Speaker 3: of time. As one economist put it, it's rubbing your
Speaker 3: future self to pay your present landlord, except the landlord
Speaker 3: discharges more. Actually, speaking of economists, did you know how
Speaker 3: many support this idea?
Speaker 4: Actually? Almost none.
Speaker 3: When forty eight out of forty nine economists think something
Speaker 3: is a bad idea, maybe we should listen and stop
Speaker 3: playing into social media hype.
Speaker 4: Here's the real issue. Australia is already.
Speaker 3: One hundred undred, one thousand homes behind schedule every single year.
Speaker 3: That means even if every single first home buyer magically
Speaker 3: had a deposit tomorrow, there still wouldn't be enough houses
Speaker 3: to purchase.
Speaker 4: That's the problem with this policy.
Speaker 3: It doesn't build more homes, it gives buyers more money
Speaker 3: to compete for the same limited supply. And when more
Speaker 3: people are fighting over the same number of houses, do
Speaker 3: you know what happens? Prices go up, not down. So
Speaker 3: what would help with housing affordability? Okay, so stepping back first,
Speaker 3: we need more supply. That means planning reform, infrastructure investment,
Speaker 3: and incentives for building more diverse and affordable housing types.
Speaker 3: New Zealand actually had success with this in Auckland. In
Speaker 3: twenty sixteen, they changed zoning laws to allow more housing
Speaker 3: types like townhomes and apartments and multi unit dwellings in
Speaker 3: areas that previously only actually allowed stand loan houses. The
Speaker 3: result of this was that rents in Auckland dropped by
Speaker 3: twenty eight percent compared to what they would have been
Speaker 3: without these changes. Impressive, right, More homes meant less competition,
Speaker 3: lower prices, and better affordability. Unsurprisingly, Second, what we need
Speaker 3: to do is look at the tax rules that shape
Speaker 3: our housing market right now. Some policies make investing in
Speaker 3: property way more attractive than other types of investing, which
Speaker 3: doesn't exactly help with first home buyers trying to get
Speaker 3: their foot in the door for the first time. We
Speaker 3: could boost first home by a grant or saving schemes
Speaker 3: that don't raid retirement funds, like expanding the first Home
Speaker 3: super Savior scheme without allowing direct withdrawals from the main superbalance.
Speaker 3: So what have we learned from our keyw neighbors across
Speaker 3: the ditch and their home ownership experience. The housing crisis
Speaker 3: is very real, but this policy is like trying to
Speaker 3: put out fire with petrol. Our system is literally the
Speaker 3: envy of the world. Why are we so keen to
Speaker 3: break something that's working. The biggest winners in this policy
Speaker 3: are current homeowners who are going to see their property
Speaker 3: values increase even more, not first home buyers, who the
Speaker 3: policy is supposedly designed to help. We are all complaining
Speaker 3: about house prices while considering a policy that's proven to
Speaker 3: make them higher. Make that make sense to me. The
Speaker 3: Australian supersystem is doing what it was designed to do
Speaker 3: help Australians build wealth or retirement. Let's not sacrifice our
Speaker 3: financial future security for a short term housing sugar hit
Speaker 3: that ultimately makes the problem even worse. If you also
Speaker 3: feel strongly about this, I would love if you could
Speaker 3: share this episode with your.
Speaker 4: Friends, your family, and anyone who you think might be thinking.
Speaker 3: Superfer housing sounds like a super idea, And don't forget
Speaker 3: like and subscribe so that I can he.
Speaker 4: Bringing you the content that you love.
Speaker 3: My friend, That is literally it from me on this Saturday.
Speaker 3: I am so worked up, but I hope that we
Speaker 3: are on the same page now. Hope you enjoy your
Speaker 3: weekend and I will see you. Write early on Monday
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