‘No Boomers' super app tackles housing crisis
Pearler, a share trading app moving into the superannuation space, has launched a product they are calling 'HomeSoon' with the aim of simplifying the steps needed to take advantage of the government's first home savers scheme (FHSS).
The company says it is also the first platform in Australia to allow customers to use open banking to track bank savings, FHSS savings, shares, and other assets in one place – regardless of whether those assets are held with Pearler. Australians are not using the first home super saver scheme. NewsWire / Nicholas Eagar Credit: NewsWire
Pearler co-founder Nick Nicolaides said house price growth is outpacing savings, meaning it is no longer sustainable for the average person to park their money in a bank account while they are saving for a deposit.
'Bank savings are no longer sustainable for a seven-eight year journey, and with that it adds complexity,' Mr Nicolaides told NewsWire.
'I don't think people really have a choice but to have their house deposit spread across bank accounts, probably some shares and the FHSS.
'It is more of a case of getting to the end goal of being wealthy enough to buy into the housing market, you now need to not only understand savings and budgeting, you now need to understand investing and this scheme,' he said.
NED-7083-Housing-price-changes
Mr Nicolaides said ideation was simple – to help first home buyers get into the housing market by taking the complexity out of a current scheme.
'We've been talking to customers for a while with only a fraction of customers actually using the scheme,' he said.
'When we asked why, it was very clear that firstly the scheme was in super which people feel some nervousness about and if you then get your head around putting additional savings into super, tracking, knowing what you can withdraw and withdrawing it in time, it quickly layers up.
'So a combination of a complex superannuation system and a not very mainstream scheme really puts most people off.'
The latest PropTrack Home Price Index shows it has never been more expensive for first home buyers to get into the market.
National house prices hit a new peak in May, lifting by 0.39 per cent over the month for a 4.12 per cent year-on-year gain.
All capital cities saw home prices grow in May, with Melbourne leading the way up 0.79 per cent, followed by Adelaide up 0.52 per cent and then Sydney up 0.39 per cent.
Nationally, since the Covid falls starting in March 2020, house prices are up 50.1 per cent for a new median house price value of $809,000, while Australia's most expensive city, Sydney, will set the median buyer back $1,124,000. House prices continue to outpace saving deposit rates. NewsWire/ Gaye Gerard Credit: News Corp Australia
Pearler's latest superannuation move follows launching a fund in late March saying it caters for younger members with a simple slogan 'for people born after 1970 (sorry, Boomers)'.
During the launch, Mr Nicolaides said the 'no Boomers' fund was more about solving a problem for younger Australians than a display of anti-Boomer rhetoric.
'If you take a casual interest in what is written about superannuation, most articles are written about how the superannuation industry can deal with retirement,' he said.
'It makes sense that it gets the most attention because it is an immediate problem now.
'But at the other end of the spectrum, the industry and the media recognise that engagement in super is lacking in younger people. If we don't fix that, then today's younger people will find themselves in the same boat in 20, 30 years time,' Mr Nicolaides said.
The FHSS allows people to contribute and access up to $15,000 of their voluntary contributions into super each financial year (up to a total cap of $50,000) for a home deposit.
The main benefit of saving for a home this way is super's lower tax rate – meaning Australians can potentially get to their deposit faster.
The scheme currently has a relatively low take up, with Pearler saying just 13.7 per cent of home buyers bought through the FHSS.
Mr Nicolaides said the onus was not on the government to market the product better but instead on the general financial advice sector to do a better job of educating people.
'The government got the ball rolling on a fantastic scheme but there is only so much that can be done,' Mr Nicolaides said.
'We have a situation in Australia where, whether generationally like it or not, most of our financial decisions are going to be self-directed for the average person on the average wage.
'It becomes our job as an industry to educate people by giving them the tools and the guidance in mediums people want to use.'
Mr Nicolaides says he hopes over time three in four Australians trying to buy a house will do so through the FHSS.
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