Ahead of the event he told The Australian Financial Review that allowing younger people to access super for housing would only exacerbate problems with the retirement income system.

Hidden assumption

He said a "hidden assumption" of the system was that people's housing costs in retirement would be low because they owned their own homes.

But demographic and economic shifts were making that assumption less valid.

"We're on the cusp of some much bigger changes," Mr Eslake said.

"The overall home ownership is the lowest it's been since 1954. And it's not just young homebuyers, but middle-aged adults among whom ownership has been declining as well."

This is despite interest rates being roughly half what they were in the previous two decades and governments having spent billions on incentives such as first home-owner grants and stamp duty concessions.


Not only has there been a decline in home ownership but there has been an even greater drop in outright home ownership. Compared with 5 years ago when almost three out of five home owners owned their home outright, home owners with a mortgage are now in the majority.

"What's particularly striking here is the decline in outright home ownership among people aged between 55 and 64," Mr Eslake said.

The number of homeowners aged 55 to 64 with a mortgage tripled to 44 per between 1995-96 and 2013-14.

Considering options

"That's an extraordinary increase," Mr Eslake said. "It means that the assumption that superannuation will allow people to support themselves and not rely on the age pension may well be wrong by a growing margin.

"If people use their superannuation to pay down their mortgage then they are obviously not going to have as much superannuation and may not have any at all, and will therefore quality for the pension."

The government is considering options enabling first home buyers to access their super but no final decision made yet.

A further crackdown on bank lending to riskier investors is also anticipated. As The Australian Financial Review reported on Wednesday, a regulatory working group is considering further reducing the investor lending growth limit of 10 per cent, which was imposed in 2015.

"APRA could tighten up their prudential controls over lending to investors," Mr Eslake said. "If, for example, the housing market were to be very soft, you might want to encourage more investment. But right now where it's running hot you'd actually want to pull it back to say 8 per cent or 5 per cent."

Mr Eslake conducted the research for the Australian Institute of Superannuation Trustees.