Homes to become much easier to buy
After securing a convincing majority election win on Saturday, Labor must now push forward full steam ahead with the contentious housing plan or be damned to break a signature promise of the campaign.
The timeline of the scheme has economists worried – with the party also yet to outline exactly where the money will come from.
Labor's $43 billion Homes for Australia Plan included the building of 100,000 new houses which would be set aside for first homeowners, who will only need a five per cent deposit instead of the usual twenty. The plan also included increased rental assistance and the construction of more social housing dwellings.
However, the five per cent scheme is set to be introduced in January 2026, while the 100,000 homes will be move-in-ready 'from 2027-28' according to the party.
Even without potential construction delays, the gap has economists fearing the market will simply ignite over the next few years, with the median $820,000 home suddenly only needing a $41,000 deposit.
The last time $41,000 could be used as a deposit for the median Aussie home was 2002, the party proudly claims.
So how will it work?
Under the scheme, 15 per cent of the property's value would be guaranteed by the Albanese Government. It means that with a five per cent deposit, first home buyers would be able to avoid Lenders Mortgage Insurance, which costs about $23,000 on average.
There will be no income caps – or caps on home value.
The party said that it will take 'further consultation with industry', however, plan to have the scheme in effect from January 1, 2026.
Independent economist Saul Eslake said the scheme will inflate the property market.
'Anything that allows people to pay less for a mortgage, which this policy will do, will result in people borrowing more money and that will in turn result in pushing prices up,' Mr Eslake said.
Prime Minister Anthony Albanese was questioned about the concerns from economists during the second election debate with the ABC.
Mr Albanese said the government needed to boost 'both' demand and supply.
'We need to give people a fair crack, particularly young people. But we have a comprehensive $43 billion Homes for Australia plan, making sure, whether it's about increased social housing, increased private rentals or increased home ownership as well, through our Help to Buy scheme, that will all assist,' he said.
'The key, of course, is supply. And that's why only Labor is offering a plan at this election to increase supply of housing.'
How many homes have already been built?
There's been a lot of numbers thrown back and forth about how many homes are currently being built in line with Labor's 2027 move-in date.
Last week, Education Minister Jason Clare and Labor's campaign co-spokesperson told ABC Radio about 2000 had already been built.
'There's about 28,000 that are under construction now,' he said.
'We finally got this legislation through the parliament and it's going to build the sort of homes that Australians need'.
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