Will first home buyer election pledges actually help the housing crisis?

Will first home buyer election pledges actually help the housing crisis?

Both major parties have unveiled policies to tackle the Australian housing crisis. Labor has proposed a shared equity scheme to reduce deposit requirements while the Coalition would allow larger loans for first home buyers. But would the schemes actually work? An RMIT expert comments.

Liam Davies, research fellow and lecturer in Sustainability and Urban Planning

“At its core, these proposed policies don’t necessarily make housing cheaper, but they do make it easier for middle income earners to become first home buyers, through greater access to finance. 

“High-income earners will not qualify due to income and purchase price limits, and for low-income earners the deposit is going to be too big a hurdle for them to enter the market. So, we are really looking at the middle chunk of the income distribution who will benefit the most from these policies.

“There's nothing necessarily wrong with helping people to access home ownership while not dealing with affordability, as long as you've got other mechanisms to help people at different income levels.

“There is a real opportunity for governments to expect more of these schemes - particularly the Labor proposal - and use them to shape urban development, providing more family flats in areas with good access to transport, jobs and services.

“There is definite precedent with both Labor and the Coalition to building housing and making that accessible to families across the income spectrum, but what's really important to think about is to ask what we get for that investment. One problem is that these dwellings will only be more accessible and cheaper to finance for the first person that buys it, but after that the house will become ‘full price’, with gains in value flowing to the original purchaser.

“With both these policies there are winners and losers – if we're going to have systems with losers, we need to know how we take care of those people.”

Dr Liam Davies is a lecturer in RMIT’s Centre for Urban Research and an expert in social housing policy and urban planning. His research looks at state and commonwealth government policies that affect affordable housing in Victoria, Australia.

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General media enquiries: RMIT External Affairs and Media, 0439 704 077 or news@rmit.edu.au

15 April 2025

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15 April 2025

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