Federal Election 2022: Labor extends helping hand to first-home buyers in regional Australia

Labor is pledging to extend a much-needed helping hand to potential first-home buyers in regional Australia as the housing affordability crisis continues to be a hot-button issue.

Labor is pledging to extend a much-needed helping hand to potential first-home buyers in regional Australia as the housing affordability crisis continues to be a hot-button issue.

Home prices surged 19.2 per cent in the combined capital city markets in 12 months to February 28, according to CoreLogic data, but skyrocketed 25.5 per cent in the combined regions.

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Due to a pandemic-induced rush to the regions, some areas saw values soar by more than 40 per cent in just one year, especially in locations within a two-hour commute of major cities. Central Coast regions such as Wamberal and Terrigal saw a 47.1 per cent and 45.2 per cent jumps respectively.

Terrigal, NSW saw a 45.2 per cent jump in home values in just one year.

Areas outside of NSW that witnessed huge annual hikes include a 34.5 per cent rise in Torquay, Victoria as well as increases in Tasmanian regions Launceston (40.3 per cent) and Burnie (30.4 per cent in Burnie).

On March 25m leader of the ALP, Anthony Albanese and Jason Clare, shadow minister for Housing and Homelessness as well as Regional Services, announced Labor’s Regional First Home Buyer Support Scheme.

The Scheme will help 10,000 Australian families a year in regional areas to buy their first home, effectively tripling the number of places regional residents received last year under the current First Home Loan Deposit Scheme.

This announcement comes one week after Infrastructure Australia released a report confirming that housing has been identified as the biggest infrastructure roadblock across regional Australia.

Labor Leader Anthony Albanese on the campaign trail. Picture: NCA NewsWire / David Swift

“With house prices having skyrocketed and a sharp drop in affordability, regional first-home buyers need and deserve their own dedicated scheme to support them to buy a home,” Mr Albanese’s announcement said.

REA Group’s director of economic research said the announcement showed bipartisan support in finding solutions to the housing affordability crisis.

“It’s obviously good to see a recognition on both sides of politics that the extra cost of LMI over and above stamp duty, and actually purchasing the property, is a hindrance for first-home buyers,” Mr Kusher said.

“I think this generally speaks to the fact governments are now well aware it’s hard for first-home buyers to save a big enough deposit. If they can remove some of the additional costs on top of that then it makes sense to do so.”

With prices climbing in the regions where local residents typically earn less than city dwellers, Mr Kusher said Labor’s caveat was appropriate.

How much Labor is pledging for residents in each state. Picture: Supplied

“There’s potentially a challenge that if a lot of people take up this opportunity then it does push up prices and local buyers might find it difficult.

“One good point is you’ve got to have lived in the area for 12 months so that really suggests a kind of try before you buy scenario.”

Mr Kusher added that despite the huge hurdles for first-time buyers, he didn’t see governments returning to the once-coveted First Home Owner Grants of the past.

“We’ve tried grants a lot of times, but I wouldn’t be surprised if they try other things first. “The NSW Government has been talking about scrapping stamp duty, and that would be a great move, although they seem to have gone a little bit quiet on that of late,” he said.

“The Jason Falinski report on housing affordability had some recommendations should definitely be looked at, particularly those encouraging local governments to allow more development, and provide them funding on the basis that they approve more houses and apartments.

REA Group Director of Economic Research Cameron Kusher says the announcement shows bipartisan support in finding solutions to the housing affordability crisis.

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Labor’s Regional First Home Buyer Support Scheme will be reserved for Australians who have lived in the region in which they are buying for more than 12 months.

The Government’s own review of the National Housing Finance and Investment Corporation called for the First Home Loan Deposit Scheme to be expanded in the regions last year.

Labor’s Regional First Home Buyer Support Scheme will help first-home buyers get into a house sooner with a deposit of just five per cent without the need to pay Lenders Mortgage Insurance.

Torquay in Victoria was another regional area that saw a huge spike in house prices in the last 12 months.

The scheme would save first-time buyers up to $32,000. In lieu of LMI, Government would act as a guarantee for up to 15 per cent of the value of the property purchased.