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TRANSCRIPT
PM: "Housing."
Dutton: "Home Ownership."
Bandt: "And just on housing."
Dutton: "Housing crisis."
Bandt: "Renters and first home buyers."
Dutton: "The dream of home ownership."
PM: "Their dream of home ownership.”
It's the topic on party leader's minds - housing.
Specifically, helping people buy their first home.
And for good reason.
It's getting harder and harder to buy your first home in Australia.
More than half of people born in the 1950s owned a home before they were 30. By 2016, that had dropped to around 35 per cent.
So, what are the major parties offering first home buyers heading into the election?
We'll start off with the current government - Labor.
“I want young people and first home buyers to achieve their dream of home ownership.”
Central to Anthony Albanese's plan is enabling all first home buyers to purchase a place with a 5 per cent deposit.
Generally, you need a 20 per cent deposit to buy a house.
If you don't have the full amount, you have to pay Lenders' Mortgage Insurance.
LMI is valued at 1 to 5 per cent of the loan, and exists to protect banks against risky loans. They take out insurance, you pay for the premium.
Under Labor's plan, the government will guarantee the difference for first home buyers - basically telling the bank they're good for the rest of the deposit amount if the home owner defaults on the loan.
“It will be available for homes valued all the way up to the average price in every city and region. And you won't have to pay a single dollar in mortgage insurance.”
This isn't a new policy - the First Home Guarantee has existed in some form since the Morrison Coalition Government.
Previously, there were restrictions on who could access it, and a limited number of placements per year, starting at 10,000 places in 2020, up to 50,000 in the last financial year.
What's different about Labor's policy is it's open to ALL first home buyers, without a cap on income, or a limit on places per year.
What that looks like for the median priced Australian house,at $820,000 is:
You can buy it with a deposit of $41,000, compared to $160,000; and you save around $35,000 in LMI costs, although the exact amount varies state by state.
But to actually service the loan with a a 5 per cent, you probably need to earn about $150,000 as a single, or $180,000 as a couple with no kids, well above the average Australian household income of $120,000 a year (according to the Grattan Institute).
None of that takes into account the other costs associated with buying a home, like stamp duty which could cost anywhere between $5,000 and $50,000 for an $820,000 home depending on where you live.
Associate Professor Michelle Cull from Western Sydney University says it may help some people.
“Lower income earners would not be able to borrow that amount anyway. So it's still not a solution for them. But for those once again on slightly higher incomes and to have security with their their work and maybe younger people who are expecting their incomes to increase, it could work very well. But if we did have interest rates increase rapidly, as we've seen in the past, then that's going to put a lot of pressure on those people with big mortgages.”
Labor is also looking at targeted increases to supply - building 100,000 new homes in eight years, reserved for first home buyers.
“No competition from property investors, just a fair crack for young Australians.”
The plan is to work with the states to speed up the house building process - fast tracking land release and planning decisions.
It includes $2 billion in grants on offer to states and territories, that will have to be matched, and $8 billion in zero interest loans.
Labor says construction on the first homes will begin in 2026, and the first will be ready to move in to by 2028.
The coalition has a two part pitch.
The first idea is recycled from the last election.
“We will allow Australians to access up to $50,000 of their super towards a deposit for their first home. That allows home ownership earlier. Your super, ultimately, is your money. It's not the government’s money.”
The money would need to be returned to super once the house was sold.
There are concerns that removing money from superannuation would impact the amount someone retires with, and that many young people don't have $50,000 in superannuation anyway.
The second is an idea that's very new to Australia.
Shadow Housing Spokesperson Michael Sukkar says the coalition will allow first home buyers to claim interest paid on tax.
“For so many young Australians, the ability for them to buy a home is constrained by the fact that with relatively high interest rates, they're just unable to make money. We're not giving them a grant, we're not giving them a free kick. We're gonna give them back a bit more of their own money for those first five years, which is the most critical time for a first time buyer.”
It's ONLY for new homes, and ONLY for first home buyers.
There's no cap on the total amount of the loan or price of the house, but it's only applied to $650,000 of a loan, and for the first five years.
And there's an income cap for who can access it - $175,000 for individuals, and $250,000 for couples.
Liam Davies from the Centre for Urban Research says it won't help with the upfront cost of a home.
“The Liberal party's policy is effectively to make it cheaper to take on larger loans. Now this is based on the idea that the household already has a deposit. Households that don't have a deposit won't benefit from this scheme, but households that have a deposit will be able to leverage that deposit slightly further or increase the amount of loan they take because of the tax concessions they'll get.”
Helping people buy their first home is one part of the plans.
The other is supply.
Labor has set a target of 1.2 million new homes to be built in 5 years, from July 1 last year, until mid 2029.
That means building 60,000 homes every three months, or 240,000 each year.
It's ambitious - Australia has never done it before - the best quarter on record saw 56,000 dwellings completed.
Between July and September last year, there were just 45,000 homes built.
Labor's new supply policy - the 100,000 new homes set aside for first home buyers - is part of this 1.2 million home goal.
Matt Bowes from the Grattan Institute says it could help.
“If that 100,000 new homes target that they've announced for the scheme is met, that would have an important impact on adding to new housing supply at a time when housing construction and housing starts are quite low, when housing construction costs are very high and interest rates are high.”
Another first term supply policy from Labor is the Housing Australia Future Fund.
It was set up in 2023, with $10 billion put into an investment account, called a future fund.
The profits made from that investment go towards housing - specifically, $500 million is taken out once a year.
The goal was to build 30,000 social and affordable homes in five years.
No homes have been completed.
Mr Albanese says some are in the pipeline.
“28,000 under construction or in planning, so awaiting approval”
The Coalition has vowed to axe the HAFF if it wins the election.
The Liberal Party has promised $5 billion towards essential infrastructure to build new homes - to establish water, power, and sewerage connections to new development sites.
Mr Sukkar says there are already places identified where it will help.
“We've worked directly with hundreds of councils, literally hundreds. We've identified the precise projects by lock 500,000 new homes, and we know those sorts of projects will be overwhelmingly projects that will be attractive to young first home buyers.”
With no policies to actually build houses, Peter Dutton says his focus is on reducing demand.
“We're cutting the migration program by 25 per cent because Labor has had it at a record high. And that's increased the demand on housing.”
The plan is to reduce permanent migration from 185,000 to 140,000 for two years, and will further reduce international students to 240,000 a year compared to Labor's current 270,000 level.
Both Labor and the Coalition will ban foreign investors buying established homes for 2 years.
The final piece of the housing puzzle is having people to build them.
Chief Executive of Master Builders Australia Denita Wawn says there aren't enough tradies.
“We need more people. We need skilled people to do the job. One of the reason that costs are so high is simply we are taking too long to build because we don't have enough skilled people.
The coalition will subsidise businesses employing apprentices in areas there's a skills shortage - giving them $12,000 a year for the first two years for new apprentices.
Labor's will continue offering free TAFE , and set up an incentive payment worth $10,000 across the course of an apprenticeship, for apprentices in residential construction.
But - will all this drive up house prices?
When Peter Dutton was asked exactly that, he said:
“Our prices will drive up home ownership. Our policies will drive up home ownership. That's what we're on about here.”
Whilst Finance Minister Katy Gallagher told the ABC modelling has been done.
GALLAGHER: "Well, it was advice from Treasury and the advice was that this expansion of this program would not have a significant impact on house prices.
REPORTER: "Is there a number?"
GALLAGHER: "No, there isn't a number.”
Independent Economist Saul Eslake says both policies will drive up house prices.
“Well, both major parties policies will have the effect of putting upward pressure on house prices by allowing people to borrow more money which they'll spend on housing than they would otherwise. And that's consistent with what's now more than 60 years of evidence that unambiguously shows that anything that allows Australians to spend more on housing, whether it's first time owner grants, stamp duty, concessions, easier lending criteria, lower interest rates, mortgage guarantee schemes, Shared Equity schemes, lower interest rates, all the proposals that are being put at this election, they result in higher house prices and fewer Australians owning housing.”
He says the coalitions tax break policy will increase what people can spend.
“Especially when combined with their other super for housing policy, will allow those eligible to borrow more and spend more on housing than they otherwise would. That will drive up prices, and even though the coalition says that skewing demand from first home buyers to new houses will prompt builders to build more new houses. The reality is that that will take time.”
And Labor's policy will have a similar effect.
“Labor’s at least being honest in admitting that they're just arguing that it won't be a significant increase in house prices.”
And lastly - the Greens.
Whilst they're not going to be in a position to form government, they may be part of a minority government.
Leader Adam Bandt says he will try to get Labor to change negative gearing and the 50 per cent capital gains tax discount while protecting small investors, if the Greens are in a kingmaking position in the next parliament.
