The big policies shaping housing this election

In a few short days, Australians will head to the polls to vote on who should lead the nation for the next four years.

Cost-of-living pressures have featured heavily in pre-election campaigning, while Australia’s complex relationship with the US has emerged as a hot-button issue for both major parties.

On housing policy, both Anthony Albanese’s incumbent Labor party and Peter Dutton’s Liberal opposition have taken drastically different approaches. Both candidates, however, claim to want to solve the same issue of getting more first-home buyers on the property ladder.

“Both major parties have put first home-buyers front and centre in this election campaign – and it’s clear they agree on the problem, even if they’re playing from different halves of the policy field,” said Anja Pannek, chief executive of the Mortgage and Finance Association of Australia (MFAA).

Albanese (pictured above left) has firmly backed the government-funded Help to Buy Scheme, while Dutton believes lower immigration and a reduction to the serviceability buffer are the ways to go. The MFAA has vocally supported the latter policy.

Albanese wants to allow all first-home buyers to purchase with a 5% deposit, eliminating the need for Lenders Mortgage Insurance (LMI), while Dutton (pictured above right) wants to permit early access to superannuation funds for use as a house deposit.

There is some bipartisan support for certain policies, chief among them maintaining the status quo on negative gearing and implementing restrictions on foreign property buyers.

What has Labor proposed?

• 5% deposit scheme expansion: Extend the existing program to allow all first-home buyers to purchase with a 5% deposit, eliminating the need for Lenders Mortgage Insurance (LMI)
• $10 billion housing fund: Commit $10 billion to construct 100,000 new homes exclusively for first-home buyers
• National housing accord: Collaborate with states and territories to build 1.2 million homes over five years, aiming to boost housing supply
• $2 billion social housing accelerator: Deliver thousands of new social homes across Australia, with all funding to be committed by states and territories by 30 June 2025
• Shared equity scheme: Implement a ‘Help to Buy’ program allowing up to 40,000 first-home buyers to co-purchase homes with the government, reducing individual financial burdens
• $10,000 apprenticeship bonus: Offer a $10,000 cash bonus to apprentices working in residential construction to encourage workforce participation in the housing sector
• Foreign buyer restrictions: Enforce a two-year ban on non-citizens purchasing existing homes to prioritize domestic buyers
• Negative gearing: Maintain current negative gearing policies, with no planned changes
• Instant asset write-off: Labor Treasurer Jim Chalmers has recently committed to extending the write off for another year, a policy recently described by Australian Chamber of Commerce and Industry chief executive Andrew McKellar as “underwhelming”

Without planting her flag in either camp, Pannek said “any initiative that responsibly supports access to home ownership is welcome.” She highlighted that many policies announced by both parties have their roots in MFAA advocacy.

For small businesses, Pannek believes the LNP’s plan to make the instant asset write-off is the superior move compared to Labor’s temporary measures. “A permanent scheme gives small businesses the certainty they need, and a $30,000 cap provides a meaningful incentive to invest and grow,” she said.

What has the Coalition proposed?

• Mortgage interest tax deduction: Allow first-home buyers of newly built homes to deduct interest payments on up to $650,000 of their mortgage from their income taxes, potentially saving around $11,000 annually
• Superannuation access for home deposits: Permit early access to superannuation funds, up to $50,000, for use as a house deposit
• Migration and foreign student reductions: Propose cutting permanent migration by 25% and reducing international student numbers by 30,000 compared to Labor's plan, aiming to free up 40,000 homes within a year
• Foreign buyer ban: Implement a ban on foreign buyers purchasing existing homes to increase availability for Australian residents
• Serviceability buffer: Advocate for reducing the serviceability buffer rate imposed by the Australian Prudential Regulation Authority (APRA) to assist homebuyers without parental financial support in obtaining loans.
• Negative gearing: Maintain current negative gearing policies, with no planned changes
• Compensation scheme of last resort (CSLR): Liberals have promised to “clean up” and fix the two-year old scheme
• Instant asset write-off: Confirmed in late-April, the Coalition will make the instant asset write-off permanent if elected into power with the threshold raised from $20,000 to $30,000

Too much demand-side focus?

“Improving access to home ownership requires more than just boosting demand – it means building enough homes to meet the needs of a growing population,” said Pannek.

Labor has an objectively stronger supply-side agenda, with 1.2 million new homes planned for the next five years. But the party has also failed to match necessary build rates ever since the policy was announced.

“Both parties are right to focus on supply, and we welcome investment in initiatives that unlock housing pipelines, particularly those that integrate infrastructure with new developments,” said Pannek. “But as we all know, supply-side reform is a long game, but it’s a necessary one.”

One thing is for sure, or at least highly likely: House prices will continue to rise regardless of which party emerges victorious this weekend.