In Adelaide on Monday, Prime Minister Anthony Albanese faced questions regarding Labor’s housing plan, unveiled just a day prior at the party’s campaign launch in Perth. That’s why housing affordability has emerged as the most important issue in the coming municipal election, particularly for first-time home buyers. Accordingly, both main parties are on a mad dash to present their platforms before the May 3 municipal election.
Labor’s housing strategy encourages and assists aspiring homeowners. It gives first-time buyers access to their new home without the burden of having to pay lender’s mortgage insurance with just a 5 percent deposit. The Australian government will guarantee these loans through its First Home Buyers Guarantee scheme. This new measure will bring enormous relief to Australians earning under a newly established income threshold. Albanese underscored that this plan would assist more Australians in buying their first home. He said, “In Australia … prices always go up.”
Coalition’s Counterproposal
Opposition Leader Peter Dutton was quick to use the opportunity to spruik the Coalition’s election pledge. He made the case that reducing net migration is a key part to solving the exacerbating housing crisis caused by Labor’s policies. Dutton is arguing for lower migration so we can again enjoy stable house price growth. When he said “I want to see them increasing”—he meant every word, of course—he was talking about wanting a steady appreciation in property values.
With a dramatic counter-punch, Dutton took on Albanese’s commitment on first home buyer deposits. He proposed introducing a radical mortgage interest tax deduction, entirely targeted at first-home buyers. This plan helps first-time buyers of newly constructed homes make interest payments tax-deductible. They can accomplish this on the first $650,000 of their mortgages by excluding it from their income taxes. Dutton’s approach cuts through the populist rhetoric by delivering short term financial relief and incentivising home ownership among young Australians.
The Stakes of Housing Affordability
Housing affordability continues to be top of mind for voters, especially for those looking to join the market. Since the first week of the campaign, Labor and the Coalition have been releasing competing policies. Their proposals illustrate their diametrically opposed philosophies on how to address this critical crisis. Albanese’s plan includes a commitment of $10 billion to construct 100,000 new homes exclusively for first home buyers, reinforcing the government’s focus on increasing housing supply.
Sadly, the economic devastation that will occur if the Labor government wins the next election. Their climb, he warned, would lead to no small amount of sudden value decline. “I don’t want to see a situation where Labor crashes the economy and somebody who’s paid $750,000 for a house today is worth $600,000 in 18 months’ time under an Albanese government,” he cautioned.
As the election approaches, voters will need to evaluate these competing visions for housing affordability and make choices that reflect their priorities and concerns regarding home ownership.
