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Super Home Buyer Scheme a “drop in the ocean” for most first home buyers

4 min read
19 May 2022
Super house deposit

Most young adults would be able to raise less than 1% of the cost of a home through the government’s proposed Super Home Buyer Scheme, according to analysis by Compare the Market.

The new initiative, which is dependent on the government’s re-election, would allow first home buyers to invest up to 40% of their super balance (up to a maximum of $50,000) toward the purchase of their first home, with no income or price limits.

Compare the Market crunched the numbers and found the money accessible under the scheme would be a “drop in the ocean” against rising property prices. When comparing these superannuation withdrawals to the total purchase price of a home, first home buyers would only be accessing between 1% and 3% of the amount required.

What % of a total dwelling price could the maximum super withdrawal get you?

Assumes they withdraw the maximum 40% of their super balance and a national median dwelling value of $748,635.

Age groupMedian super balance40% of balance% of median national dwelling value
35-39$       57,664$       23,0663.1%
30-34$       35,834$       14,3341.9%
25-29$       17,226$         6,8900.9%
*Super balance figures based on figures from the Association of Superannuation Funds of Australia (ASFA). House price figures based on CoreLogic’s monthly reports as at May 2022.

With a median national dwelling value of nearly $750,000, a 20% deposit – the usual minimum needed to avoid Lenders Mortgage Insurance (LMI) – would be $150,000 of savings.

Using the latest median property price and median super balances by age, the calculations show that the typical 25-29 year old would only be able to contribute around 5% ($6,890) of a standard 20% deposit. That’s less than 1% of the median dwelling value.

For a 30–34-year-old, 40% of their super balance would get them just 10% of a standard deposit needed ($14,334), and 35–39-year-olds would get 15% ($23,066).

Withdrawing the maximum of $50,000 would give you roughly one-third (33%) of a standard deposit.

What % of a median deposit (20%) could first home buyers with the median super balance access?

Assumes they withdraw the maximum 40% of their super balance.

Median 20% deposit % of deposit: 25-29-year-olds % of deposit: 30-34-year-olds% of deposit: 35-39-year-olds
COMBINED CAPITALS$165,4824%9%14%
COMBINED REGIONS $117,9726%12%20%
*Super balance figures based on figures from the Association of Superannuation Funds of Australia (ASFA). House price figures based on CoreLogic’s monthly reports.

Compare the Market’s banking expert David Ruddiman said the policy did not address the fundamental issues of supply and affordability.

“A scheme such as this risks raising house prices further by stimulating demand,” Mr Ruddiman said.

“While the government counters that first home buyer purchases are less than 1% of the total value of the housing market, this is a bit of a smokescreen, as it doesn’t directly speak to their longer-term plans for improving housing supply and affordability.

“For those who really do need help, like younger home buyers on low-to-medium incomes, their accumulated super balance generally speaking simply will not be sufficiently high enough to make the Australian dream of homeownership imminently achievable for them.

“Forty per cent of the median super balance for a 30-year-old first home buyer is less than $15,000, which wouldn’t even get you one-tenth of the standard 20% deposit needed in order to avoid paying lenders mortgage insurance (LMI) on top of your other upfront home purchase costs.

“With the Reserve Bank of Australia (RBA) set to continue to raise the cash rate to more than 2% over the next couple of years, we could soon see house price falls in the double digits across our capital cities.

“Fixing housing affordability isn’t going to be simple, as there is no single silver bullet solution, but we do need a broad suite of policies and reforms from local, state and federal governments to properly respond to what is potentially fast becoming a generational train wreck.

“If this scheme does become a reality and you aren’t sure if it’s suitable for you, it is advisable to consult a licensed financial advisor who can give you expert financial advice, and separately a mortgage broker to explore other alternatives available to first home buyers.”

What % of a median deposit (20%) could the maximum $50,000 withdrawal get you?

dwelling value 
20% deposit$50,000
as portion of 20% deposit 
COMBINED CAPITALS$827,410$165,48230%
COMBINED REGIONS $589,858$117,97242%
*Super balance figures based on figures from the Association of Superannuation Funds of Australia (ASFA). House price figures based on CoreLogic’s monthly reports as at May 2022.

For more information, please contact:

William Jolly | 0405 968 369 | [email protected]   

Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, travel and personal finance products from a range of providers. Our easy-to-use comparison tool enables consumers to find products that best suit their needs and back pocket.



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avatar of author: William Jolly

Written by William Jolly

William is a Senior Finance Writer at Compare the Market, and has previously worked as a finance journalist for several years. He specialises in writing about financial products like home loans in ways that the average Australian can understand and enjoy. When he's not writing about saving money, William enjoys playing football (soccer), watching a good movie and spending time with his dog.

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