For people trying to enter the housing market in Baw Baw Shire in recent years, the difficulty in stockpiling a deposit - often while paying rent - has become far more acute. 

In Baw Baw Shire the median price of a house from June 2019 to June 2024 rose from $440,000 to $625,000, according to data from Housing Monitor.

That is a 42 percent hike, far greater than wage growth in the same period.

In 2019 a 20 percent deposit on a median $440,000 Baw Baw Shire property was $88,000.

In 2024 a 20 percent deposit on a median $625,000 property was $125,000. 

With a federal election looming the ALP and the Coalition are spruiking their housing affordability solutions. 

The Coalition has proposed to let Australians access $50,000 of their superannuation to buy their first home. This money would be withdrawn from a super account but would have to be returned when the house was sold to bolster retirement savings.

Labor, meanwhile, has been rolling out its $10 billion Housing Australia Future Fund, which aims to build 30,000 new affordable homes before 2028. 

Labor also delivered a Regional First Home Buyer Guarantee, which allowed eligible people to buy a property with as little as a five percent deposit, thus enabling them to enter the market without paying Lenders Mortgage Insurance.

On Monday, the University of South Australia released research that found the Coalition's plan would put upward pressure on housing prices.

Housing affordability not getting easier for young Aussies

A recent Household, Income and Labour Dynamics in Australia (HILDA) Survey showed two thirds of all Australians believed young Australians would never be able to afford a home.

CoreLogic research shows national home values have been increasing rapidly since the start of the Covid pandemic in March 2020, rising by a cumulative 38.4 percent, adding approximately $227,000 to the median dwelling value.

Australian wages have risen by less than half that amount.

According to data from the Australia Bureau of Statistics (ABS), Baw Baw Shire is one of the fastest growing regional areas in Victoria, expanding by three percent a year. In 2023 the population was 60,644, and by 2041 it is forecast to grow to more than 84,000.

With such a large increase in population, housing availability and affordability will remain an issue in Gippsland for years to come.

According to the Housing Monitor website, in the five years to June 2024, median house prices in East Gippsland increased annually by an average of 11.8 percent. This is compared to an increase of 8.9 percent in the rest of regional Victoria.

Is taking from your super the answer?

First home buyers are currently able to access their superannuation to pay off a housing loan. When paying off a loan a superannuation account can contribute up to $15,000 a year and no more than $50,000 in total.

Under the Coalition’s new proposal first home buyers will be able to use $50,000 of their super up front for a home deposit.

Letting young people tap into their superannuation to increase their capital might not be a good strategy for stabilising house prices, according to the University of South Australia’s Professor Chris Leishman. 

Leishman’s report examined thousands of other published studies on housing to analyse the economic forces that drive the property market.

The modelling used data from house sales from 2000 to today and found that if the Coalition’s policy was active over that period it would have increased house prices by between an extra seven and 10 percent.

It stated it would be uncontroversial to predict that an increase in demand arising from a policy shift would increase market prices. This was unless policy was accompanied by either a corresponding increase in supply, or another policy change which led to a reduction in demand.

“Raiding retirement savings for house deposits would just unleash a supercharged price hike in house prices, not create more new home buyers,” said Super Members Council’s CEO Misha Schubert.

Liberal housing spokesperson Michael Sukkar labelled the work of Professor Leishman as “junk”.

“Using your own super to contribute towards a first-home deposit offers significantly better financial outcomes compared to being a lifelong renter,” Sukkar told NewsWire.

Liberal candidate for Monash, Mary Aldred, and Nationals MP for Gippsland, Darren Chester, did not respond to a request for comment prior to publication.