Report – The housing market effects of using superannuation savings for housing

Professor Chris Leishman, University of South Australia

This report applies statistical and econometric methods to household survey and housing market data to better understand the implications of demand-side housing policy interventions. The report briefly reviews the history of such policies in Australia and internationally before moving on to consider a specific and more recent suggestion for policy reform linked to savings in superannuation. Recent policy proposals would permit prospective first homeowners to access part of their superannuation balance to speed up their acquisition of a first home loan deposit. This report adopts no ideological or political position but is focused on estimating the likely housing market impacts of such a policy change. Three econometric models are drawn upon. The first uses household survey data to estimate the statistical significance of savings to the probability of non-homeowners transitioning to become homeowners. Two alternative time series macro-econometric models of the Australian housing market are then specified and estimated. The combination of models predicts that the proposed policy change would inflate housing prices by between 7.4% and 10.3% after two years than would otherwise be the case.