The political battle over housing affordability is heating up — but are proposed solutions missing the mark?
As both major parties unveil election promises aimed at supporting first-home buyers, one thing is becoming increasingly clear: demand-side incentives without real supply-side reform may only push property prices higher.
Labor has announced a significant expansion of the First Home Guarantee Scheme, including the removal of income caps, a lift in property price thresholds (up to $1.5m in Sydney), and unlimited places. The intent is to remove the burden of lenders’ mortgage insurance (LMI), which often adds tens of thousands in upfront costs for buyers with less than a 20% deposit.
Sally Tindall of Canstar notes:
“Lenders mortgage insurance is an unfair thorn in the side of first home buyers… money spent on this insurance goes towards covering the bank, not the borrower.”
Meanwhile, the Coalition proposes tax deductions on mortgage interest for newly built homes—up to $650,000 over five years—targeted at first-home buyers. The policy, according to Peter Dutton, is about “restoring the dream of home ownership” and incentivising construction.
These policies will no doubt help some buyers into the market, but it’s worth asking: are we simply shifting affordability problems further down the line?
Adding demand without addressing constrained supply risks further price escalation. As the article rightly points out:
“Anything easy and popular won’t work to solve housing affordability.”
Despite these hurdles, homeownership is still achievable for many Australians. In 2024, around 20% of property purchases were made by first-home buyers—proof that discipline, support, and the right guidance can still open doors.
If you’re navigating your own path to home ownership, staying informed is essential.
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