Liberal Party Warns Labor’s 5 Percent Deposit Scheme Will Make Housing More Expensive

‘We just had the prime minister admit this morning Labor’s housing policy is going to make housing policy more expensive,’ Dave Sharma said.

This aerial view taken on Nov. 26, 2024 shows a single property on a large piece of land amid a densely developed area with many homes in Sydney. Brook MITCHELL/AFP via Getty Images

The Opposition has raised concerns the Labor government’s 5 percent housing deposit scheme for first home buyers will push up house prices.

This comes after Prime Minister Anthony Albanese said in a press conference on Oct. 1 that house prices would “slightly increase” due to the expanded scheme.

Shadow Assistant Treasury Minister Dave Sharma said young voters wanted the government’s housing policy to make housing more affordable.

“We just had the prime minister admit this morning Labor’s housing policy is going to make housing policy more expensive. And I don’t think anyone thinks, especially people who are aspiring to buy a home, the policy of the government to make housing more expensive is a good idea,” he said on Sky News Australia.

“This is what economists have been warning. This availability of mortgage insurance is no longer means tested, so it’s going to be available to the children of billionaires. All it is going to do is push housing prices up and do nothing to address supply.”

The scheme officially started on Oct. 1, enabling home buyers to purchase a home with a deposit of just $42,200 on the median home price of $844,000. There are no income caps or wait lists, and lender’s mortgage insurance is not needed.

Additionally, single parents and legal guardians are able to buy a house with just a 2 percent deposit.

Nationals Call for Government to Fix Immigration

Nationals leader David Littleproud called on the government to control immigration and prioritise skilled builders to help boost housing supply.

“But what a federal government can do is make sure they can pull levers like immigration to make sure that they have the appropriate amount of immigration into this country, and also prioritise the skills we need to address the shortage of housing,” he said on Sky News Australia.

“Over the last three years, this government has prioritised dog groomers and martial arts instructors over tilers, roofers, bricklayers that would build our supply.”

The Nationals leader pointed out the government’s measure would create a “demand issue” that would continue to put upward pressure on prices.

“What we’ve got is a supply issue, and what a federal government can do is to make sure that they can pull the levers to help support local and state governments.”

“The reality is you need to fix supply at the federal level, you need to fix immigration, and at a state and local government level, we need to put the pressure on them to get moving on approvals.”

Albanese Says Housing Prices Will Increase Slightly

Labor says its scheme will enable first home buyers to reach their dream of home ownership sooner.

In a press conference, Albanese was asked how much property prices would increase under the new plan.

“Well, it will have a minimal impact. There will be a slight increase in prices, but already 185,000 Australians have benefited from this scheme with minimal impact on prices,” Albanese told reporters.

“Treasury did modelling. They suggest a very small increase, but what it will do is to allow more young people to get into home ownership.”

Albanese noted this was just one of the range of measures the government is undertaking to improve the housing situation.

“We are dealing with supply. We have that incentive for state and territory governments as well, a $3 billion incentive for them to deliver more homes so that we reach our target of 1.2 million homes,” he said.

Housing Minister Clare O'Neil said the government has a $43 billion housing agenda, most of which will support the building of new homes.

“Look, our government absolutely understands that the housing affordability issues faced by the country are solved by housing supply. We need to build homes, more homes, more quickly. And that’s exactly what our government’s doing,” she said.

“But the prime minister and I are not going to look a generation of young people in the eye and tell them that we’re not going to do anything to help them until these supply challenges are resolved.”