March 21, 2025 • 13 mins
There’s a lot of noise right now about using your superannuation to help buy your first home. And on the surface? It sounds pretty good. But in this episode, I break down show you exactly what happened when New Zealand tried this approach—and why it ended up hurting the very people it was meant to help.
We’ll talk about rising prices, the impact on long-term wealth, and why this policy could affect everyone with super—not just first-time buyers. If you're thinking “but it’s my money, why not use it?”, this episode will make you think twice.
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Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements.
The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708, AFSL - 451289.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Hello. My name is Satasha Nabananga Bamblet. I'm a proud
yor the Order Kerniye Whoalbury and a waddery woman. And
before we get started on She's on the Money podcast,
I would like to acknowledge the traditional custodians of the
land of which this podcast is recorded on a wondery country,
acknowledging the elders, the ancestors and the next generation coming
(00:22):
through as this podcast is about connecting, empowering, knowledge sharing
and the storytelling of you to make a difference for
today and lasting impact for tomorrow. Let's get into it.
Speaker 2 (00:34):
She's on the Money. She's on the Money.
Speaker 3 (00:57):
Hello, and welcome to She's on the Money podcast. That's
helping you sort out your finances now so future you
can live their best life.
Speaker 4 (01:05):
There's been a lot of.
Speaker 3 (01:06):
Chatter recently about a policy idea that could help first
home buyers break into the market sooner. And if you've
heard of it already, I'm sure you're thinking, Wow, VI,
that sounds so great. But before we get too excited,
what if I told you we don't actually have to
guess how this is going to turn out. I'm Victoria
Devine and today For this special bonus Saturday episode, you
(01:30):
and I are going to look Across the Ditch to
see what happened when New Zealand tried almost the exact
same thing. I'm just going to spoil it for you
real quick here. It didn't actually go quite as planned.
But first I want you to imagine a policy that
makes houses more expensive, reduces retirement savings, and increased government spending.
Speaker 4 (01:50):
Would you vote for it? Probably not? Well, actually, okay,
we're friends.
Speaker 3 (01:54):
Across the Ditch introduced a scheme that let first home
buyers dip into their super which is actually keyw Saver
over there to buy a home, which, in theory sounds
fantastic because who doesn't want to help first home buyers
get into their first home quicker? But let's talk about
what actually happened. Let me set I guess the scene.
(02:16):
You're a first home buyer. You have been diligently saving
every single dollar you've been topping up your retirement fund.
You're super, your Key WE Saver, same same, You're going
to stash away extra cash and then you're doing everything right.
All of a sudden, the government says, hey, you can
actually dip into your SUPER or your keyw saver.
Speaker 4 (02:36):
For a house deposit. You're going to go, oh, my.
Speaker 3 (02:38):
Goodness, this has been so hard, how good? I would
absolutely love to do that, because this has been honestly
a long slog, and it is getting further and further
away from being reality. That three bedroom place in a
really great suburb actually starts to feel a little bit
more enrich But here's the catch. You're literally not the
only one with this idea. There are thousands of other
(03:00):
first home buyers who are thinking exactly the same thing,
And suddenly, at every single option, everyone's budget has an
extra fifty grand in it. That house it was listed
at six hundred grand, well now at six hundred and
fifty thousand dollars. Prices rise, competition is heating up, and
you know what happens in the end, you are still
(03:20):
locked out of the market. And am I guessing no?
Because that's exactly what played out for our friends in
New Zealand. After they introduced this policy, house prices started
rising even faster, jumping from seven point six percent to
nine point two percent per year.
Speaker 4 (03:37):
Buyers suddenly had more money.
Speaker 3 (03:39):
To spend, which in theory was a good idea, but
so did their competition, so sellers just raised the prices
to match with deposits Struggling to keep up, buyers had
to borrow more money just to stay in the game,
and the proportion of high loan to value ratio mortgages
taken by first home buyers actually skyrocketed for from twenty
(04:00):
five percent to seventy five percent since twenty fourteen. What
does that actually mean. Well, people were stretching themselves really thin.
They were taking on bigger mortgages relative to their deposits,
leaving them vulnerable to even more financial stress if interest
rates rose, or life threw in an unexpected curve ball
like a job loss or maybe an emergency expense. Many
(04:23):
had not much financial cushioning to fall back on. But
you know what the hardest hit was lower income earners
and renters. They couldn't access as much from Keywi saver,
yet they still faced skyrocketing house prices. Meanwhile, the biggest
winners they were the property investors. While first home buyers
were dipping into their retirement savings just to get on
(04:45):
the ladder, just to compete, investors sat back and they
watched their property values climb higher deposits pushed prices up,
making homes even more expensive and played right into the
hands of those who already had multiple properties.
Speaker 4 (05:03):
So instead of.
Speaker 3 (05:04):
Leveling the playing field, this policy did the exact opposite.
First home buyers were left with bigger debts, higher risks,
and fewer opportunities to get into the market, all while
the housing affordability crisis only got worse. And you know what,
here's the wild part. If you didn't think that was wild,
This policy wasn't just ineffective. It actually made home ownership
(05:26):
rates worse. In New Zealand, home ownership of people in
their thirties dropped by seven percent instead of increasing, So
despite all that extra money being pumped into the market,
fewer young people were actually ending up owning homes. And
here's something telling. Seventy seven percent of first home buyers
in New Zealand now use their super to buy a home,
(05:48):
up from sixty five percent in twenty fifteen. That means
more and more young buyers have to dip into their
retirement savings just to compete in the housing market. Now,
three hundred and seventy nine thousand and New Zealanders have
collectively withdrawn in New Zealand dollars ten billion dollars from
their retirement accounts. That's ten billion dollars not growing for
(06:10):
their retirement and all for what to chase incredibly expensive
homes in a market that's been artificially heated by the
very policy meant to cool it down. Oh and did
I mention that the New Zealand Treasury explicitly warned that
this would happen. They literally said this scheme would stimulate
demand and increase house prices. And you know what, they
(06:32):
weren't wrong. They work very on the money. Stay with
me because after the break we're going to zoom out
and we're going to look at what this could actually
mean for Australians, not just home buyers. Welcome back, my friends.
We have been chatting about the proposal to let Australians
dip into their superannuation for house deposits and why the
(06:55):
New Zealand experience should make us stop and think. But
it's not just about crisis, right, Let's talk about what
happens to your suberannuation when you're not investing it optimally.
Australian mysuperbalanced options achieve about seven point eight percent returns annually,
compared to just six point six four percent for Keywi
(07:15):
Saver balanced options. That difference might seem really small, but
over forty years of working life it is massive. Keywi
Saver funds hold sixteen point five percent less in growth
assets than Australian super funds, largely because they need to
keep more money accessible for these housing withdrawals. That means
(07:36):
funds take fewer investment risks and generate lower long term
returns because of this policy. This affects everyone with super
not just home buyers.
Speaker 4 (07:46):
Right.
Speaker 3 (07:47):
If Australian funds had to accommodate large scale withdrawals for housing,
which they might have to, they'd likely be forced into
taking more conservative investment strategies to make sure that they
have enough cash on hand to deal with this. That
means less money invested in high growth assets and over
time law returns for literally all of their members, whether
(08:09):
you're buying a home or not. And I need you
to remember, our supersystem was designed to reduce the reliance
on the aged pension. Australia's pension expenditure is projected to
decrease from two point five percent to two point three
percent of GDP by twenty sixty. Meanwhile, new Zealand's pension
costs are actually expected to increase over the same period
(08:32):
of time. As one economist put it, it's rubbing your
future self to pay your present landlord, except the landlord
discharges more. Actually, speaking of economists, did you know how
many support this idea?
Speaker 4 (08:45):
Actually? Almost none.
Speaker 3 (08:46):
When forty eight out of forty nine economists think something
is a bad idea, maybe we should listen and stop
playing into social media hype.
Speaker 4 (08:55):
Here's the real issue. Australia is already.
Speaker 3 (08:59):
One hundred undred, one thousand homes behind schedule every single year.
That means even if every single first home buyer magically
had a deposit tomorrow, there still wouldn't be enough houses
to purchase.
Speaker 4 (09:11):
That's the problem with this policy.
Speaker 3 (09:13):
It doesn't build more homes, it gives buyers more money
to compete for the same limited supply. And when more
people are fighting over the same number of houses, do
you know what happens? Prices go up, not down. So
what would help with housing affordability? Okay, so stepping back first,
(09:34):
we need more supply. That means planning reform, infrastructure investment,
and incentives for building more diverse and affordable housing types.
New Zealand actually had success with this in Auckland. In
twenty sixteen, they changed zoning laws to allow more housing
types like townhomes and apartments and multi unit dwellings in
(09:54):
areas that previously only actually allowed stand loan houses. The
result of this was that rents in Auckland dropped by
twenty eight percent compared to what they would have been
without these changes. Impressive, right, More homes meant less competition,
lower prices, and better affordability. Unsurprisingly, Second, what we need
(10:15):
to do is look at the tax rules that shape
our housing market right now. Some policies make investing in
property way more attractive than other types of investing, which
doesn't exactly help with first home buyers trying to get
their foot in the door for the first time. We
could boost first home by a grant or saving schemes
(10:35):
that don't raid retirement funds, like expanding the first Home
super Savior scheme without allowing direct withdrawals from the main superbalance.
So what have we learned from our keyw neighbors across
the ditch and their home ownership experience. The housing crisis
is very real, but this policy is like trying to
(10:57):
put out fire with petrol. Our system is literally the
envy of the world. Why are we so keen to
break something that's working. The biggest winners in this policy
are current homeowners who are going to see their property
values increase even more, not first home buyers, who the
policy is supposedly designed to help. We are all complaining
(11:19):
about house prices while considering a policy that's proven to
make them higher. Make that make sense to me. The
Australian supersystem is doing what it was designed to do
help Australians build wealth or retirement. Let's not sacrifice our
financial future security for a short term housing sugar hit
(11:40):
that ultimately makes the problem even worse. If you also
feel strongly about this, I would love if you could
share this episode with your.
Speaker 4 (11:50):
Friends, your family, and anyone who you think might be thinking.
Speaker 3 (11:53):
Superfer housing sounds like a super idea, And don't forget
like and subscribe so that I can he.
Speaker 4 (12:00):
Bringing you the content that you love.
Speaker 3 (12:02):
My friend, That is literally it from me on this Saturday.
I am so worked up, but I hope that we
are on the same page now. Hope you enjoy your
weekend and I will see you. Write early on Monday
for a Money Diary if I shared on She's on
the Money is general in nature and does not consider
(12:23):
your individual circumstances. She's on the Money exists purely for
educational purposes and should not be relied upon to make
an investment or financial decision. If you do choose to
buy a financial product, read the PDS TMD and obtain
appropriate financial advice.
Speaker 4 (12:38):
Tailored towards your needs.
Speaker 3 (12:40):
Victoria Divine and She's on the Money are authorized representatives
of money. Sheper pty Ltd ABN three two one IS
six four nine two seven seven zero eight AFSL four
five one two eight nine
Hello. My name is Satasha Nabananga Bamblet. I'm a proud
yor the Order Kerniye Whoalbury and a waddery woman. And
before we get started on She's on the Money podcast,
I would like to acknowledge the traditional custodians of the
land of which this podcast is recorded on a wondery country,
acknowledging the elders, the ancestors and the next generation coming
(00:22):
through as this podcast is about connecting, empowering, knowledge sharing
and the storytelling of you to make a difference for
today and lasting impact for tomorrow. Let's get into it.
Speaker 2 (00:34):
She's on the Money. She's on the Money.
Speaker 3 (00:57):
Hello, and welcome to She's on the Money podcast. That's
helping you sort out your finances now so future you
can live their best life.
Speaker 4 (01:05):
There's been a lot of.
Speaker 3 (01:06):
Chatter recently about a policy idea that could help first
home buyers break into the market sooner. And if you've
heard of it already, I'm sure you're thinking, Wow, VI,
that sounds so great. But before we get too excited,
what if I told you we don't actually have to
guess how this is going to turn out. I'm Victoria
Devine and today For this special bonus Saturday episode, you
(01:30):
and I are going to look Across the Ditch to
see what happened when New Zealand tried almost the exact
same thing. I'm just going to spoil it for you
real quick here. It didn't actually go quite as planned.
But first I want you to imagine a policy that
makes houses more expensive, reduces retirement savings, and increased government spending.
Speaker 4 (01:50):
Would you vote for it? Probably not? Well, actually, okay,
we're friends.
Speaker 3 (01:54):
Across the Ditch introduced a scheme that let first home
buyers dip into their super which is actually keyw Saver
over there to buy a home, which, in theory sounds
fantastic because who doesn't want to help first home buyers
get into their first home quicker? But let's talk about
what actually happened. Let me set I guess the scene.
(02:16):
You're a first home buyer. You have been diligently saving
every single dollar you've been topping up your retirement fund.
You're super, your Key WE Saver, same same, You're going
to stash away extra cash and then you're doing everything right.
All of a sudden, the government says, hey, you can
actually dip into your SUPER or your keyw saver.
Speaker 4 (02:36):
For a house deposit. You're going to go, oh, my.
Speaker 3 (02:38):
Goodness, this has been so hard, how good? I would
absolutely love to do that, because this has been honestly
a long slog, and it is getting further and further
away from being reality. That three bedroom place in a
really great suburb actually starts to feel a little bit
more enrich But here's the catch. You're literally not the
only one with this idea. There are thousands of other
(03:00):
first home buyers who are thinking exactly the same thing,
And suddenly, at every single option, everyone's budget has an
extra fifty grand in it. That house it was listed
at six hundred grand, well now at six hundred and
fifty thousand dollars. Prices rise, competition is heating up, and
you know what happens in the end, you are still
(03:20):
locked out of the market. And am I guessing no?
Because that's exactly what played out for our friends in
New Zealand. After they introduced this policy, house prices started
rising even faster, jumping from seven point six percent to
nine point two percent per year.
Speaker 4 (03:37):
Buyers suddenly had more money.
Speaker 3 (03:39):
To spend, which in theory was a good idea, but
so did their competition, so sellers just raised the prices
to match with deposits Struggling to keep up, buyers had
to borrow more money just to stay in the game,
and the proportion of high loan to value ratio mortgages
taken by first home buyers actually skyrocketed for from twenty
(04:00):
five percent to seventy five percent since twenty fourteen. What
does that actually mean. Well, people were stretching themselves really thin.
They were taking on bigger mortgages relative to their deposits,
leaving them vulnerable to even more financial stress if interest
rates rose, or life threw in an unexpected curve ball
like a job loss or maybe an emergency expense. Many
(04:23):
had not much financial cushioning to fall back on. But
you know what the hardest hit was lower income earners
and renters. They couldn't access as much from Keywi saver,
yet they still faced skyrocketing house prices. Meanwhile, the biggest
winners they were the property investors. While first home buyers
were dipping into their retirement savings just to get on
(04:45):
the ladder, just to compete, investors sat back and they
watched their property values climb higher deposits pushed prices up,
making homes even more expensive and played right into the
hands of those who already had multiple properties.
Speaker 4 (05:03):
So instead of.
Speaker 3 (05:04):
Leveling the playing field, this policy did the exact opposite.
First home buyers were left with bigger debts, higher risks,
and fewer opportunities to get into the market, all while
the housing affordability crisis only got worse. And you know what,
here's the wild part. If you didn't think that was wild,
This policy wasn't just ineffective. It actually made home ownership
(05:26):
rates worse. In New Zealand, home ownership of people in
their thirties dropped by seven percent instead of increasing, So
despite all that extra money being pumped into the market,
fewer young people were actually ending up owning homes. And
here's something telling. Seventy seven percent of first home buyers
in New Zealand now use their super to buy a home,
(05:48):
up from sixty five percent in twenty fifteen. That means
more and more young buyers have to dip into their
retirement savings just to compete in the housing market. Now,
three hundred and seventy nine thousand and New Zealanders have
collectively withdrawn in New Zealand dollars ten billion dollars from
their retirement accounts. That's ten billion dollars not growing for
(06:10):
their retirement and all for what to chase incredibly expensive
homes in a market that's been artificially heated by the
very policy meant to cool it down. Oh and did
I mention that the New Zealand Treasury explicitly warned that
this would happen. They literally said this scheme would stimulate
demand and increase house prices. And you know what, they
(06:32):
weren't wrong. They work very on the money. Stay with
me because after the break we're going to zoom out
and we're going to look at what this could actually
mean for Australians, not just home buyers. Welcome back, my friends.
We have been chatting about the proposal to let Australians
dip into their superannuation for house deposits and why the
(06:55):
New Zealand experience should make us stop and think. But
it's not just about crisis, right, Let's talk about what
happens to your suberannuation when you're not investing it optimally.
Australian mysuperbalanced options achieve about seven point eight percent returns annually,
compared to just six point six four percent for Keywi
(07:15):
Saver balanced options. That difference might seem really small, but
over forty years of working life it is massive. Keywi
Saver funds hold sixteen point five percent less in growth
assets than Australian super funds, largely because they need to
keep more money accessible for these housing withdrawals. That means
(07:36):
funds take fewer investment risks and generate lower long term
returns because of this policy. This affects everyone with super
not just home buyers.
Speaker 4 (07:46):
Right.
Speaker 3 (07:47):
If Australian funds had to accommodate large scale withdrawals for housing,
which they might have to, they'd likely be forced into
taking more conservative investment strategies to make sure that they
have enough cash on hand to deal with this. That
means less money invested in high growth assets and over
time law returns for literally all of their members, whether
(08:09):
you're buying a home or not. And I need you
to remember, our supersystem was designed to reduce the reliance
on the aged pension. Australia's pension expenditure is projected to
decrease from two point five percent to two point three
percent of GDP by twenty sixty. Meanwhile, new Zealand's pension
costs are actually expected to increase over the same period
(08:32):
of time. As one economist put it, it's rubbing your
future self to pay your present landlord, except the landlord
discharges more. Actually, speaking of economists, did you know how
many support this idea?
Speaker 4 (08:45):
Actually? Almost none.
Speaker 3 (08:46):
When forty eight out of forty nine economists think something
is a bad idea, maybe we should listen and stop
playing into social media hype.
Speaker 4 (08:55):
Here's the real issue. Australia is already.
Speaker 3 (08:59):
One hundred undred, one thousand homes behind schedule every single year.
That means even if every single first home buyer magically
had a deposit tomorrow, there still wouldn't be enough houses
to purchase.
Speaker 4 (09:11):
That's the problem with this policy.
Speaker 3 (09:13):
It doesn't build more homes, it gives buyers more money
to compete for the same limited supply. And when more
people are fighting over the same number of houses, do
you know what happens? Prices go up, not down. So
what would help with housing affordability? Okay, so stepping back first,
(09:34):
we need more supply. That means planning reform, infrastructure investment,
and incentives for building more diverse and affordable housing types.
New Zealand actually had success with this in Auckland. In
twenty sixteen, they changed zoning laws to allow more housing
types like townhomes and apartments and multi unit dwellings in
(09:54):
areas that previously only actually allowed stand loan houses. The
result of this was that rents in Auckland dropped by
twenty eight percent compared to what they would have been
without these changes. Impressive, right, More homes meant less competition,
lower prices, and better affordability. Unsurprisingly, Second, what we need
(10:15):
to do is look at the tax rules that shape
our housing market right now. Some policies make investing in
property way more attractive than other types of investing, which
doesn't exactly help with first home buyers trying to get
their foot in the door for the first time. We
could boost first home by a grant or saving schemes
(10:35):
that don't raid retirement funds, like expanding the first Home
super Savior scheme without allowing direct withdrawals from the main superbalance.
So what have we learned from our keyw neighbors across
the ditch and their home ownership experience. The housing crisis
is very real, but this policy is like trying to
(10:57):
put out fire with petrol. Our system is literally the
envy of the world. Why are we so keen to
break something that's working. The biggest winners in this policy
are current homeowners who are going to see their property
values increase even more, not first home buyers, who the
policy is supposedly designed to help. We are all complaining
(11:19):
about house prices while considering a policy that's proven to
make them higher. Make that make sense to me. The
Australian supersystem is doing what it was designed to do
help Australians build wealth or retirement. Let's not sacrifice our
financial future security for a short term housing sugar hit
(11:40):
that ultimately makes the problem even worse. If you also
feel strongly about this, I would love if you could
share this episode with your.
Speaker 4 (11:50):
Friends, your family, and anyone who you think might be thinking.
Speaker 3 (11:53):
Superfer housing sounds like a super idea, And don't forget
like and subscribe so that I can he.
Speaker 4 (12:00):
Bringing you the content that you love.
Speaker 3 (12:02):
My friend, That is literally it from me on this Saturday.
I am so worked up, but I hope that we
are on the same page now. Hope you enjoy your
weekend and I will see you. Write early on Monday
for a Money Diary if I shared on She's on
the Money is general in nature and does not consider
(12:23):
your individual circumstances. She's on the Money exists purely for
educational purposes and should not be relied upon to make
an investment or financial decision. If you do choose to
buy a financial product, read the PDS TMD and obtain
appropriate financial advice.
Speaker 4 (12:38):
Tailored towards your needs.
Speaker 3 (12:40):
Victoria Divine and She's on the Money are authorized representatives
of money. Sheper pty Ltd ABN three two one IS
six four nine two seven seven zero eight AFSL four
five one two eight nine
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