Federal election 2025: Anthony Albanese forced to defend Labor’s housing policies from criticism

Neither Anthony Albanese nor Peter Dutton can guarantee their respective housing policies won’t drive up prices, as they defended their new offerings from mounting criticism.

Fresh off their campaign launches, both the Prime Minister and the Opposition Leader headed to residential construction sites on Monday to sell their pledges and bat away concerns their policies would do little to solve the supply issue at the centre of the housing crisis and would instead heat up the market.

Mr Albanese, in Adelaide, talked up Labor’s pledge to expand a Coalition scheme allowing first homebuyers to purchase a new-build with a five per cent deposit, and spend $10 billion to help build 100,000 new affordable dwellings exclusively for the cohort to buy.

Mr Dutton, in his home city of Brisbane, spruiked his offer to make interest payments on the first $650,000 of a first home buyer’s mortgage tax deductible for the first five years if they purchased a new build.

However, eminent economist Chris Richardson has called the policies “a dumpster fire of dumb stuff” which wouldn’t help fix the housing crisis.

“Making it easier for first homebuyers to buy is the go-to policy of Governments who are avoiding doing the hard yards. The same equation applies: Australian housing suffers from too much money chasing too few homes, so adding to the extra money going in results in ever higher prices,” he said.

Asked what he made of the comments, Mr Albanese said Mr Richardson should pay a visit to the construction site and observe the jobs being created, the economic activity occurring, and the people who will soon live in the homes.

Mr Richardson had argued that while Labor had put supply-side policy on the table, those homes would arrive well after the extra demand they’re adding.

Labor’s new policy would build 100,000 new homes for a cohort of 640,000 people over eight years. Housing Minister Clare O’Neil said Labor “has been working assiduously on building new homes for three years now, and it’s working”.

Master Builders Australia on Saturday said Labor’s 1.2 million homes by 2029 target was now 160,000 behind - an improvement from the 400,000 lag it was experiencing six months ago.

Labor also batted away criticism the policy would mean young Australians were taking on more debt than they could handle to service increasingly expensive mortgages.

Since January 2020, just shy of 165,000 first home buyers have benefited from the exiting home guarantee scheme and only three have defaulted.

But when quizzed on whether he wanted the median house price to drop, Mr Albanese said “prices tend to rise”.

“What we want to do is to make sure that people have accessibility for home ownership. What we want to do is to take away the disincentive, which is there where people just can’t get a deposit,” he said.

Treasurer Jim Chalmers on Monday said the policies would not have a “substantial impact on demand or on prices”.

Asked whether he wanted house prices to go up or down, Mr Dutton said he wanted to see house prices “steadily increase”.

“I want to make sure that house prices steadily increase and we’ll do that if we get the supply-demand equation right,” he said from the Greens-held seat of Ryan.

The Coalition’s policy, in conjunction with their plan to allow first-home owners to dip into their support, has also been panned for failing to address the supply issue.

Another well-respected economist, Saul Eslake, pondered why both major parties kept doing things “they know will put upward pressure on house prices, and exacerbate the problem they are trying to solve?”

Mr Eslake said the Coalition’s latest offering would “supercharge housing prices”.

“It will actually make the problem of housing affordability worse,” he said.

Mr Dutton rejected that criticism, saying the Coalition’s proposals to cut migration and spend $5 billion for 500,000 new homes - a policy announced last year - was addressing that side of the equation.

“Our policy is about increasing supply and reducing demand by cutting the migration program. Now, if you do that, if you got more supply and meeting the demand which is insatiable at the moment, then that’s a good economic policy,” Mr Dutton said.

Liberal campaign spokesman James Paterson had earlier suggested it was a bit rich for home-owning economists to criticise the Coalition’s policy.

“I have seen some of the commentary from economists and others, and I have to say when it comes from someone who owns their own home and probably bought it many years ago, it’s going to come across to many Australians as, frankly, pretty out of touch and tone-deaf,” he said.

Mr Dutton said the Coalition’s latest announcement was “the missing piece of the picture” in a suite of housing measures and underpinned his bid to be “the Prime Minister for housing, home ownership and housing affordability and accessibility”.

He enlisted the help of his 20-year-old son Harry, an apprentice, to talk about his own ambitions to buy a home and how he is “saving like mad” to do so.

The Opposition Leader sidestepped four different questions about whether his son would be benefiting from the “bank of mum and dad”, saying only that he didn’t want first home ownership to be limited to those who had help from their parents.

After some back and forth, Mr Dutton said: “I really, strongly, firmly believe in home ownership”.