New idea to solve ‘national crisis’ of housing affordability

A bold new idea has been put forward to solve the “national crisis” of soaring house prices and help more people into the property market.

Labor has made a new pledge to tackle Australia’s growing housing crisis, promising extra support to people planning on buying in the regions.

In the latest pre-election pledge, Opposition Leader Anthony Albanese and Labor’s housing spokesperson Jason Clare said regional housing prices had jumped by 26 per cent last year.

The NSW Central Coast has been the site of the most dramatic increase in house prices – Wamberal has had a 47.1 per cent rise, and Terrigal a 43.2 per cent rise.

Under the proposed Regional First Home Buyer Support Scheme, 10,000 families a year in regional areas would get extra assistance to buy their first home.

That would triple the number of places regional Australians received last year under the existing First Home Loan Deposit Scheme.

The announcement comes after the Property Council of Australia found more than 70 per cent of voters were concerned younger Australians would not be able to buy a house, due to rising prices outstripping the ability to gain a mortgage deposit.

The council said more than half of 18-34 year olds consider housing affordability to be a key election issue, and will likely cast their vote based on the major party’s policies.

An extra 10,000 regional first-home buyers would benefit from Labor’s plan to tackle the housing crisis. Picture: NCA NewsWire /Brenton Edwards

Mr Albanese said too many Australians, particularly younger generations, could not access the housing market.

He said the rapidly rising cost-of-living was cutting into people’s savings and pushing home ownership further out of reach.

“Because they can’t access that also, their rents are going up. They’re just struggling to get by,” Mr Albanese said from Shellharbour.

“We hear a lot from this government, and we’ll hear a lot in the budget on Tuesday about how successful it will be, but it doesn’t relate to what people really experience on the ground in communities, like here in the Illawarra, where people are really doing it tough.

“Some people have been saving for years to try and get into homeownership, and what I want for Australians … is to have access to buying a home in our great regions.”

Mr Albanese said he wanted to keep the ‘Great Australian Dream’ alive, while encouraging more people to move to the regions. Picture: NCA NewsWire / David Swift

Mr Albanese said his team wanted the “Great Australian Dream” to stay alive and hopefully inspire more people to live in the regions.

“(Under) our plan … 10,000 homebuyers will save up to $32,000 in mortgage insurance, be able to secure a home with a deposit as low as five per cent, with the government guaranteeing up to 15 per cent of the purchase price,” he said.

“These provisions will really assist people … and make a difference.”

Mr Clare said it was astounding that regional Australia’s house prices had risen at a higher rate than those of capital cities.

“This is the next part of our plan to tackle the housing crisis … This is about making sure no Australian is left behind,” Mr Clare said.

Under the existing First Home Loan Deposit Scheme, 10,000 first home buyers each year can access a government guarantee of up to 15 per cent of the value of their property.

Those eligible need to have saved just five per cent to pay the mortgage insurance, with the National Housing Fiannce and Investment Corporation guaranteeing the rest.

This scheme works in tandem with other government programs, like the First Home Super Saver Scheme, First Home Buyers scheme, and state-based building grants.

Labor says its scheme would come into effect from 2023, and would apply to people who have lived in regional parts of the country for more than 12 months.

It’s estimate the scheme would cost $12.1m in the first year, and would run in addition to the existing First Home Loan Deposit scheme which is available to 10,000 first home buyers on a first-in, first-served basis.

Labor would review and update the scheme’s price caps every six months, as opposed to the yearly review that occurs under the current scheme.