Super withdrawals for housing pose a triple risk: higher house prices, lower home ownership rates, and making Australians poorer

The Super Members Council has warned proposals floated again today for Australians to raid their super for housing risk hiking house prices and rents - putting the dream of home ownership even further out of reach for younger Australians.

In a cautionary tale, after New Zealand introduced a similar scheme, house prices took off like a rocket – growing at twice the rate of those in Australia up to the market peak (in 2022) – and home ownership rates fell by 7 percentage points for Kiwis in their 30s.

And in a study commissioned by SMC in 2025, leading housing economist University of South Australia Professor Chris Leishman found a policy enabling first home buyers to withdraw super for house deposits could see house prices hike by up to 10.3%. 

“As respected economists have consistently noted, the key to improve housing affordability is to boost housing supply – not to tell people to withdraw their super early which would just push up house prices,” said the Council’s CEO Misha Schubert.

“These sorts of policy ideas would just make cost of living pressures worse – not better – for battling Australians.”

Pyxis research shows Australians value their super, with 80% saying super will be critical for their standard of living in retirement.

Older Australians are particularly worried about proposals for Australians to withdraw their super early.

Research by National Seniors Australia found 88 per cent of older Australians are concerned about policies to expand early access to super. More than 70 per cent of seniors say they would not have saved enough for retirement without compulsory super.

The Intergenerational Report released yesterday projects spending on the Age Pension will fall from 2.3 per cent of GDP today to 1.8 per cent by 2066, and the proportion of people above pension age relying on government income support is expected to fall from 66 per cent to 52 per cent.

By comparison, the GDP pension burden is estimated to be 10 per cent in the United Kingdom, 8 per cent in Canada, 7 per cent in New Zealand, and 6 per cent in the United States.

But Australia’s success in taking pressure off taxpayers could be reversed if the safeguards on super are weakened.

“Cashing out super would push up Age Pension costs for taxpayers, leaving less money to fund the services that battling households rely on – hospitals, medicines, schools, roads, and drought and flood relief,” Ms Schubert said.

Today’s commentary by an Opposition frontbencher came a fortnight after One Nation proposed allowing workers to divert one quarter of their employer’s compulsory super contributions into current spending.

The Council’s modelling found that cashout proposal would leave a median full-time worker around $25,000 (in today’s dollars) worse off in retirement after just three years.