First homebuyers would shave three years off saving for a property under a coalition proposal to allow Australians to access their superannuation balance for housing, a study has found.

If elected at the next federal election due by May 17, a Peter Dutton-led government would allow Australians to access up to $50,000 from their super to buy their first home.

That would allow the median homebuyer to purchase a home three years earlier than they would otherwise and increase the home ownership rate from 66 to 70 per cent, economists Peter Tulip and Matt Taylor found in a report released on Wednesday.

“Letting home buyers access their superannuation would help lots of young families get over the deposit hurdle, which is the biggest obstacle preventing them from home ownership,” said Dr Tulip, chief economist at policy institute the Centre for Independent Studies.

The policy is not without its drawbacks, however.

Superannuation underpins Australians’ financial security in retirement and drawing down one’s balance risks long-term savings.

Instead of allowing first homebuyers to withdraw money from super to spend on the purchase price of a home, Dr Tulip recommended letting them use their super balance as security, giving them access to low-deposit loans in exchange for higher repayments.

That would help level the playing field for first homebuyers who aren’t able to draw on wealthy parents as guarantors.

The risk of super being seized as collateral by lenders is slim, given it would only occur on the 0.1 per cent of mortgages that result in foreclosure.

Under the coalition’s policy, homebuyers who withdraw money from their super will need to return it to their balance when the house is sold.

But the capital gain on a home is typically less than what you would get from super, so even if the share of capital gain was repaid to the super account, it would still be lower than if it had not been withdrawn in the first place, Dr Tulip said.

Nevertheless, a lot of people would still consider it worthwhile to have a lower super balance if it meant more security of tenure earlier in life, he said.

“We want to ensure people have a choice, and opening up superannuation for housing will provide them with that clear choice,” said coalition home ownership spokesman Andrew Bragg.

But the policy presented another issue, Dr Tulip said.

By increasing spending capacity for first homebuyers, demand for housing would increase, driving up prices and exacerbating unaffordability.

The policy would need to be coupled with measures that boosted supply, such as the coalition’s plan to drive new home building by paying for enabling infrastructure, or reduced demand such as removing first homer owner grants, which are less effective.

Housing Minister Clare O’Neil said the super for housing scheme would cause house prices to skyrocket, threaten retirement savings and provide little to no assistance for people most at need, who typically have lower super balances.

This post was originally published on Michael West.