The Labor government has promised that all first-home buyers will be able to access five per cent deposits for the purchase of their first homes.
They are also planning to build up to 100,000 homes, for sale only to first home buyers, with $10 billion dollars to be invested.
The proposal will also introduce a $1,000 tax deduction from 2026 to 2027.
Labor pledged during the election campaign that all home owners will be able to buy a house with a 5 per cent deposit, thus not having to pay Lenders Mortgage Insurance (LMI).
Prime Minister Anthony Albanese, who used housing as a big motivator in the lead up to the election, said the government planned to get more Australians into their own homes.
“I want to help young people and first home buyers achieve the dream of home ownership,” he said.
“When a young person saves a five per cent deposit, my government will guarantee the rest with their bank.”
Currently the median house price in combined Australian capital cities is now $1,014,019, while the median dwelling in Australia’s regional areas is $586,483.
Regional hubs in states will have the same price limits as the state capital, which means that Newcastle would have a $1.5 million limit, the same amount as Sydney. Other regional areas would have smaller limits, different for each state or territory relating to the average price for housing there.
Finance Student Ryan O’Dempsey said there were pros and cons to Labor’s new scheme.
“It is quite a good initiative just increasing accessibility with the reduction of deposit requirement, and a commitment to building 100,000 houses too just addresses supply shortages,” Mr O’Dempsey said.
“By increasing demand with the economic incentive of a lower deposit ,economics proves people respond to incentives, and by having a slow roll out of the supply, the cost of building time of the proposed 100,000 houses, demand is going to massively increase before the supply is met.
“It’s a bit uncertain how this will actually play out in the market, I’d say it’s a great starting point but might need continual economic stimulus, government intervention and support in the long term to make this work and also just make sure that in the future more people will be able to benefit from similar support.”