Many young Australians living in the capital cities will not be able to pay for a house deposit, even if they drained their entire retirement savings, a report has found.
Rates of home ownership are declining for young Australians as prices climb and supply struggles to keep pace with demand.
In 2000, the median house price was about four times the average full-time salary, 23 years later it is now eight times the mean income.
As a result, one-third of households under 35 years old owned their dwellings between 2019 and 2020, a decrease from 48 per cent from 1994 data.
The federal opposition has proposed allowing Australians to withdraw up to 40 per cent of their retirement savings - to a maximum of $50,000 - so they could buy their first home.
But a study by the Association of Superannuation Funds of Australia examined 300,000 taxpayers and found no Sydneysider aged 25-34 could pay for a deposit on an average house or unit in the harbourside city using their superannuation alone.
Even a couple in Sydney with the median amount of super would be more than $150,000 short on a median-priced house under these circumstances.
Melbourne was hardly any better, where only one couple in the top 20 per cent of superannuation balance holders could pay for an entire deposit with their retirement nest eggs.
ASFA chief executive Mary Delahunty said delving into super would not solve the housing crisis.
"While superannuation may seem like a tempting pot to raid, our analysis shows it will only benefit those young people who are already more likely to be able to afford a home, and not solve the crippling supply-side deficit that is fuelling our housing crisis," she said.
Most young people also have relatively low superannuation balances compared to older Australians, which means they could be priced out under this policy.
Additionally, drawing from super is likely to increase house prices by increasing demand without addressing supply, pushing home ownership further from the reaches of young Australians.
"Accessing superannuation is not the silver bullet to solving Australia’s housing crisis," Ms Delahunty said.
Instead, the housing crisis must be tackled holistically, ASFA's report says.
The lack of cohesion on housing policy across different levels of government must be addressed and replaced with a coordinated national approach.
