Older Australians allowed to draw on superannuation to fund property loans are being afforded an unfair and potentially short-sighted advantage, a leading business academic says.
Important regulatory considerations around whether retirees should be able to access super savings to buy a home are being overlooked, according to University of NSW Business School professor Anthony Asher.
And those paying for it are the next generation, he adds.
Statistics published by the Australian Prudential Regulatory Authority suggest about $15 billion is taken from superannuation annually.
Australian Bureau of Statistics data shows a quarter of new loans are issued to people who already own a dwelling and are aged between 45 and retirement.
One argument against super access is the increase in demand for property it creates, which drives up prices.
"It can be argued this appears good for the economy because those selling are likely to spend some of the increase in the short run," Prof Asher said.
But where does the money come from?
"Ultimately from the pockets of those who will eventually buy the dwellings from them. And the buyers' spending on other things will be crimped for their entire lifetimes," he said.
"And this clearly is what makes it unfair to younger generations - young children and their parents currently living in cramped conditions."
The ABS estimates more than 300,000 families with children need another bedroom, while 1.2 million couples without children at home have three or more spare bedrooms.
Prof Asher also noted banks willingly give 30-year mortgages to older borrowers, even those in their 60s. He has acquired two himself, to be repaid before his 96th birthday.
"To my knowledge this is never mentioned in debates around house prices even though it is likely to push prices higher," he said.
While taking smaller loans than younger people, rough calculations suggest lending to older borrowers is worth up to $70 billion a year.
"If these loans had, instead, to be repaid by the age of 65, the amount borrowed could be smaller by as much as $30 billion," Prof Asher said.
"This could perhaps mean a 10 per cent reduction in loans made each year."
Excessive lending to older borrowers is economically unreasonable in that it contributes to financial instability, he added.
"One needs to accept that banks are only capable of making 30-year loans and funding them by short-term deposits and savings because the government is prepared to intervene in liquidity crises."
Australian Associated Press