I had an idea for a potential policy and I’ll write it here to keep a record of it.
Using superannuation for first-property deposits. While the purpose of super is savings for old age (and reduced dependence on the state), people might find it difficult to enter the property market in Australian capital cities due to high house prices. Compulsory super has resulted in many workers having a pool of super.
Some advantages: potential access to many thousands or tens of thousands of dollars to help obtain a residential property deposit – reduces the difficulty (the “potential barrier” in physics-talk) to obtain a residential property deposit.
Some disadvantages: diverts part of an individual’s super pool into one particular investment and so reduces the “degrees of freedom” for super managers to invest the money where it will result in the greatest return. The individual can have negative impact on the value of the investment as they have control over the property.
I’ll find out a bit more about this.
Update: Super funds could also be drawn upon to pay off a substantial fraction of a first-property loan – this would reduce the on-going costs of a mortgage if the length of the loan isn’t commensurately reduced. You could have some combination of super being used to help pay the deposit and help pay off a part of the loan. While I would expect that, on average, the return to an individual’s superannuation account would be reduced as part of the super has been fixed into one investment (unless the property market goes exceptionally well), this cost could be outweighed by the greater ability for people to enter the property market.