Labor and Coalition Announce New Policies for First Home Buyers
Home ownership in Australia has dropped consistently over the past several decades. The obstacles that first home buyers face are many, and home ownership rates among young people in particular are dropping. As a result, Labor and the Coalition are pushing for new policies to address the issue.
What are the policies?
The Albanese government has proposed a plan that would allow first home buyers to buy a home with only a 5 per cent deposit. In addition to the financial incentives, the plan also includes a goal to build 100,000 new homes specifically for these first-time buyers. By provided new housing, Labor aims to address the issue of home ownership from the supply side as well.
The Coalition’s policy would make mortgage payments deductible from the owner’s income taxes. Furthermore, the scheme would be available to all first-time homeowners who earn less than $175,000 a year. That number increases to $250,000 for couples. However, the rules of the policy would only apply to newly built properties.
How Will First Home Buyers Policies Affect the Market?
Economists have raised questions about the policies, stating that both plans will likely have an inflationary affect.
Hal Pawson, from the University of New South Wales city Futures Institute, says the Coalition’s policy would be the first time in decades that such a major change has been proposed.
According to the Coalition’s spokesperson, Michael Sukkar, the plan would be a “massive structural change to our tax system” to encourage first home buyers into the property market.
The Greens chimed in on the matter as well, saying the opposition’s plan would cause prices to skyrocket.
The Master Builders Association showed support for both plans.
“Helping more Australians into their own home isn’t just good housing policy – it’s good economic and social policy,” Master Builders’ chief executive, Denita Wawn, said of Labor’s policy.
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