Anthony Albanese concedes first homebuyer deposit scheme will raise prices but says it’s worth it
Anthony Albanese has conceded there will be a “slight increase” in house prices due to his expanded Government scheme to help first home buyers get into the market with smaller deposits.
The 5 per cent deposit guarantee has been expanded to everyone looking to buy their first house as of Wednesday, and the caps on house prices lifted to better reflect average prices around the country.
It fulfils an election pledge the Prime Minister unveiled at Labor’s campaign launch in Perth in April.
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By continuing you agree to our Terms and Privacy Policy.Treasury modelling released with the policy predicted it would drive up house prices 0.5 per cent over six years.
“There will be a slight increase in prices, but already, 185,000 Australians have benefited from this scheme with minimal impact on prices,” Mr Albanese said on Wednesday.
“But what it will do is to allow more young people to get into home ownership.”
Housing Minister Clare O’Neil said that 0.5 per cent impact “will be absolutely dwarfed by things like the movement of interest rates or construction costs” in the same time period.
But the Greens said it was the equivalent of adding $55 billion to property prices over the next six years.
Housing spokeswoman Barbara Pocock labelled it reckless.
“In the midst of a national housing crisis, this scheme will add billions of dollars to property prices. How is this a solution? Labor is turbocharging the housing crisis,” she said.
“If Labor’s goal is to make housing even more out of reach for everyday Aussies - it’s certainly succeeded.
“This policy sounds good on paper but it’ll only drive up house prices and plunge first-home buyers deeper into debt.”
The deposit guarantee scheme was initially set up by the Morrison Government but was restricted in the number of places each year and had relatively low caps placed on income levels and house prices for those applying.
The Government expects about 80,000 people will use the expanded scheme each year, out of a total 110,000 first-home buyers annually.
