20 Apr 2017

Why dipping into your super for your first home in Sydney sounds silly

By Fred Haggar, Property Search 4U


The current debate around whether or not first home buyers should be able to access their superannuation to buy their first home has been polarising but it’s important to look at the facts.

Let’s take the example of a first home buyer who is looking to buy a unit in Sydney where the current average unit price is $670,000.

With a 20% deposit of $134,000 plus stamp duty of approximately $26,000 and conveyancing fees of $2,000, the first home buyer needs $162,000 in cash.

The table below shows the average Australian superannuation balance in 2016:


Superannuation Balance















So even if the Government’s plans to allow first home buyers access to their superannuation are ratified next month, the average first home buyer in Sydney who is less than 35 year old, is still short by a substantial $111,000.

Even the 35-44 year old buyer requires to source a whopping $62,000 in cash from somewhere else. More importantly, this policy combined with the current unrealistic low interest rate, will result in exuberant buyers competing like hell for the same property, in turn increasing prices even further.

The long-term impact of this policy is that the first home buyer’s super will be depleted forever to the extent that by the time they consider retirement, there won’t be much left in the kitty. Meaning?

They will have to rely on the Government which means our income tax rates will need to go up so the working Australian at the time will be paying for the retiring Australian who dipped into their super 30 or 40 years ago, to buy an overinflated priced property.

Sensible or silly?


Disclaimer: Any views or opinions represented in this blog are personal and belong solely to the blog post’s author, and do not represent the views or opinions of the Real Estate Buyers Agents Association of Australia.