Just look at this graph !
The Morrison Government first allowed people to withdraw up to $20,000 from their superannuation from April last year and that program ran for approximately nine-months.
In that time, around 3.5 million people withdrew a cumulative $36 billion, with around 500,000 pretty much emptying their super accounts.
According to figures from analytics firm AlphaBeta, in the two weeks following a superannuation withdrawal, 64 % of additional spending was on non-essentials, including clothing, furniture, takeaways, alcohol and……gambling !!
It is therefore refreshing to see that there were people who used the opportunity as a deposit for a home.
According to Digital Finance Analytics (DFA), 22% of first homebuyers who have purchased a property in the last six months did so with a deposit, at least partially made up by withdrawals from their superannuation. A further half of those withdrew the maximum $20,000 from their super over the course of the policy’s two rounds.
First home buyer activity has become a driving force supporting rising property prices. So what happens when the buying frenzy driven by temporary incentives ends?
Well, under proposed plans, first homebuyers being able to withdraw part of their super to use as part of a deposit for a home might become a permanent fixture.
It is just a proposal at this stage but the post pandemic property market is sure to have many more surprises in store for us yet !
My message to first home buyers is simple, don’t buy just “anything”, buy “something”.
My mentor Steve McKnight coined that phrase and it is as profound as it is simple. He never bought just “anything”, every property he did buy made him a multi-millionaire !
You can’t achieve goals like that by just buying “anything” !
So buy something in line with how you would like your future financial goals to play out, not just “anything ” that will do today. With opportunity , comes opportunity cost.
Don’t let the opportunity cost be greater than the opportunity.
If you are taking on a big commitment like a home loan and eagerly getting into debt, ensure you learn how to manage a commitment like that responsibly. Manage it to wealth, not to forever be locked into a job just to pay the mortgage ! #ratrace
The RBA has committed to low interest rates for a few years, but a loan commitment is for much longer. You might get less time for murder ! #Dadjoke
Your loan repayment may be affordable today, but how much movement in interest rate basis points will it take to put you and your family under mortgage and financial stress?
We can help you calculate and better prepare for the future.
Call us now for a chat, we wont charge you for the first consultation. It is important more people understand tomorrow’s consequences of today’s buying decisions.
Not every property is the right property for first home buyers, or for anyone else for that matter.
Contact us today to find out if your next property, first home or otherwise, is taking you closer to the future you want, or further away from it.
Click here to get in touch or just email me at shehan@premiumpropertyprofits.com.
Shehan Tambi
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