As Australia moves on from a historic election victory for the Labor Party, it’s worth reflecting on what it promised voters before we all went to the polls.
Housing became a central theme of last month’s election, and the policies of the returned Labor Government are likely to have an impact on the ability of first homebuyers to break into the market.
Before breaking down these promises, it’s worth reflecting that the last Labor Government’s housing agenda was blocked for more than two years in the Senate – and this held up progress significantly.
And despite the degree of its latest victory in the House of Representatives, it still must negotiate legislation through the current Senate.
All that being said, here are the key housing pledges the new Government made during the campaign:
100,000 new homes – The Government has promised to invest $10 billion to build up to 100,000 homes reserved only for first home buyers with no competition from property investors. The money will not only be for construction but also infrastructure and land purchases. The aim is to have the first of these properties come online in 2027. There is also a wider scheme, called the Homes for Australia plan, to build 1.2 million homes before June 2029.
5% deposits – Next year, the Government will extend the Home Guarantee Scheme to everyone seeking to buy their first home. There will be no caps on the number of applicants or a ceiling on earnings. First homebuyers will be eligible to purchase property anywhere in Australia with a deposit as low as 5%. As part of the deal, they would also avoid Lenders Mortgage Insurance (LMI), which costs about $23,000 on average.
Smaller mortgages – This is another first homebuyer promise. The “Help to Buy” shared-equity scheme will begin later this year and allow it to “pitch in” up to 40% of the upfront cost of a first home. When a first homebuyer sells, they’ll be required to return 40% of the profit on the transaction, plus the Government’s original investment.
Accelerate construction – Australia continues to miss its new housing targets, according to the Australian Bureau of Statistics. However, the Government says it will make a $54 million investment in advanced manufacturing of prefabricated and modular home construction. These types of buildings can take half the time to complete compared with traditional construction techniques.
State incentives – In a second part of its strategy to accelerate construction, the Government has promised to provide $120 million from the National Productivity Fund to incentivise states to remove red tape and help more homes be built faster.
More tradies – Some $78 million will be spent to fast-track the qualification of 6,000 tradespeople.