Younger aussies want to tap into their superannuation to buy property

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BREAKING into superannuation savings early is the answer for many younger Australians hoping to make the home ownership dream come true, new findings have revealed.

Millenials those born after 1982 want to fund stumping up a house deposit by using their hard-earned super savings to get their foot onto the property ladder.

New research commissioned by online loan-bidding platform LoanDolphin found of the 1000 respondents aged between 18 and 34, a majority (60 per cent) want to use super as a solution to their home ownership woes.

Administration assistant Melissa Hurwitz, 23, and her sister Faye, 24 both live with their mother in her Sydney home and Melissa says despite not paying rent, saving a house deposit has been tough for the pair who are joining financial forces.

Weve decided we want to buy an investment property together but we dont have enough money yet and probably need another six to 12 months of savings,’ she says.

I believe property is a good investment but its a bit unattainable, at the moment if we put our money together we have about $40,000 for a $400,000 property but we are looking to buy a $500,000 to $600,000 investment.

Using super is a fantastic idea, theres been times when Ive had more super in my account than money in my bank account.

Many lenders allow house deposits of five to 10 per cent but borrowers with smaller deposits will be hit with expensive lenders mortgage insurance, a charge that protects the bank, not borrower if the borrower defaults.

LoanDolphins chief executive officer Ranin Mendis believes tapping into super should be allowed to help get younger people begin building wealth.

Given the current housing affordability crisis, the time is right for the government to innovate when it comes to young Aussies and property,’ he says.

Saving the required deposit is moving out of reach for many young Australians so they are seeking more innovative ways to save or build a deposit.

Mendis suggests younger Aussies set realistic monetary goals, get rid of credit cards, work to boost their income and make direct savings from each pay packet to get started.

He says most of LoanDolphins customers take about three to five years of consistent savings to buy property.

But the Australian Institute of Superannuation Trustees chief executive officer Tom Garcia says while super is a long-term savings vehicle for retirement its a band-aid solution to allow this money to be used to buy a home.

Recognising that declining home ownership is a growing social problem, the super industry is working with the Government to investigate and potentially invest in large scale affordable housing solutions,’ he says.

@sophieelsworth