One Nation's super-for-housing plan risks inflating housing prices further
Superannuation sitting idle feels like an obvious fix for housing unaffordability — but the economics of every similar scheme suggest buyers end up paying twice.
Pauline Hanson wants Australians to unlock their superannuation to buy a home. The policy, announced by One Nation ahead of the federal election, would let first home buyers access a portion of their retirement savings as a housing deposit. The pitch is intuitive: housing is expensive, retirement savings are sitting there, why not use one to get the other? The answer is that it will not make housing cheaper. It will make it more expensive, and the buyer will pay twice.
Every demand-side housing intervention has been capitalised into higher prices
The mechanism is not complicated. Housing prices are set at the margin by what buyers can afford to bid. When policy raises the ceiling on what any cohort of buyers can bring to an auction, sellers and vendors adjust accordingly. This is not a prediction; it is what has happened every time Australia has deployed a demand-side housing intervention, from first home buyer grants to stamp duty concessions to the current Help to Buy shared equity scheme. Each one was designed to help people get into the market. Each one was capitalised, at least partially, into the price of entry.
The Coalition's own version of this policy, floated before the last election as the Super Home Buyer Scheme, drew a Reserve Bank warning that it would add to price pressures rather than reduce them. One Nation's variant would produce the same effect through the same mechanism. The fact that it is coming from a different party does not change the economics.
A 30-year-old who withdraws $50,000 from super today does not lose $50,000 in retirement. They lose $50,000 compounded over 35 years, which, at an average real return of around five per cent, is closer to $275,000 in today's money.
The retirement cost is larger than it looks, and arrives when recovery is hardest
What separates this from merely unhelpful is the retirement dimension. Superannuation is not a savings account that tops up once you spend it. It is a compounding asset. A 30-year-old who withdraws $50,000 from super today does not lose $50,000 in retirement. They lose $50,000 compounded over 35 years, which, at an average real return of around five per cent, is closer to $275,000 in today's money. The buyer gets into a home sooner. The cost arrives later, and it arrives larger, mostly invisibly, and often at a point in life when there is no capacity to recover it.
This matters at a national scale too. Superannuation is one of the few mechanisms keeping future aged pension costs in check. A policy that systematically drains it for housing, particularly if it becomes a standing entitlement rather than a one-off measure, creates an unfunded liability that shifts onto the public balance sheet a generation from now. The bill does not disappear; it gets deferred.
The actual solution is hard, which is why policies like this keep arriving
The deeper problem with policies like this one is that they keep arriving because the actual solution is genuinely difficult. As we've covered in previous analysis on negative gearing and CGT concessions, demand-side interventions tend to be politically attractive precisely because they appear to do something for an identifiable constituency, while supply-side reform requires taking on councils, existing homeowners, developers, and state bureaucracies simultaneously. Zoning reform, faster approvals, infrastructure levies, increased density near transit corridors, all of these are harder to announce and slower to produce a ribbon-cutting moment. Queensland's recent Housing Code changes show what genuine supply-side reform looks like: unglamorous, procedural, and genuinely useful.
One Nation's housing platform is not without a coherent internal logic. Its migration policy targets a real pressure point on demand, even if the design has significant gaps. And there is a legitimate frustration behind the super-for-housing idea: for many Australians, superannuation is their largest financial asset, while homeownership feels out of reach. The policy responds to that frustration. It simply does not resolve it. It moves the goalposts without changing the distance.
The test of any housing policy is not whether it helps some buyers into the market. Most demand-side policies do that for someone. The test is whether it makes housing more affordable overall, leaves buyers in a better financial position over time, and does not generate costs that land elsewhere in the system. On all three counts, this one falls short.
First home buyers who use it will likely find they paid a higher price and arrived at retirement with a thinner cushion. That is not a housing policy. It is a financial trade-off dressed up as one.
Sources
The Bearing — Negative gearing and CGT discounts reshape who can afford property
The Bearing — Pauline's object lesson in politics
The Bearing — Housing code simplification might actually make more homes
The Bearing — More-affordable homes, or more affordable homes?
The Bearing — Why Australia's housing cooling is only half the story
Frequently Asked Questions
Why would using superannuation for a house deposit make prices go up?
Housing prices are set at the margin by what buyers can bid. When a policy puts more money in buyers' hands without increasing the number of homes available, sellers adjust their prices upward to absorb that extra capacity. This is the same mechanism that has partially capitalised every Australian first home buyer grant and stamp duty concession into higher prices.
How much super would a first home buyer actually lose in retirement by withdrawing early?
A 30-year-old who withdraws $50,000 today does not simply lose $50,000 at retirement — they lose the compounded growth on that money over roughly 35 years. At an average real return of five per cent, that $50,000 becomes approximately $275,000 in today's money by retirement age.
Didn't the Coalition already try this policy?
Yes. The Coalition proposed the Super Home Buyer Scheme before the last federal election, and the Reserve Bank warned at the time that it would add to housing price pressures rather than relieve them. One Nation's current proposal works through the same mechanism and would produce the same effect.
What would actually make housing more affordable in Australia?
Supply-side reform — zoning changes, faster planning approvals, increased density near transit corridors, and infrastructure levy reform — addresses the underlying constraint in the housing market. Demand-side policies like grants, concessions, or super access put more money into a market that doesn't have enough homes, which tends to benefit sellers more than buyers.
Does using super for a home deposit affect the aged pension?
It creates a downstream fiscal risk. Superannuation is one of the main mechanisms reducing future aged pension costs; if large numbers of Australians draw it down for housing, more people arrive at retirement with insufficient savings and become eligible for the pension, shifting the cost to the public balance sheet a generation later.