Labor announces policy to buy 40 per cent stake in private homes and tackle ‘housing crisis’

Federal Opposition Leader Anthony Albanese will promise to slash the cost of buying a home for tens of thousands of Australians as part of a policy under which a Labor government would pay for up to 40 per cent of new houses.

The policy will form the centrepiece of Labor’s campaign launch in Perth on Sunday as Albanese looks to highlight cost-of-living pressures as a key plank to getting elected.

Opposition Leader Anthony Albanese will make the announcement in Perth on Sunday.Credit: Alex Ellinghausen

The announcement comes just days before the Reserve Bank is expected to raise interest rates for the first time in more than a decade on Tuesday, further exacerbating pressures on households which have seen the cost of basic items soar in recent years.

Greens leader Adam Bandt will also reveal on Sunday that affordable housing is one of the party’s top five priorities and that it will be a key negotiating item in the event of a hung parliament.

Albanese said Labor’s policy, called Help to Buy, was part of its plan to “tackle the housing crisis”. The scheme will be available for up to 10,000 households a year.

“After nine long years in government, housing affordability has only got worse under the Liberal-National government,” he said.

Under the policy, a Labor government would contribute up to 40 per cent of the purchase price of a new home and up to 30 per cent of the purchase price for an existing home.

In Sydney and NSW regional centres, the property price would be capped at $950,000 and could save homebuyers up to $380,000 on a new house and $285,000 on an existing house.

In Melbourne and Victorian regional centres, the property price cap of $850,000 would save people $340,000 on a new house and $255,000 on an existing house.

People would be able to buy out the government’s stake of the house over time. Labor has previously promised a $10 billion fund to invest in social housing by putting money into a new Housing Australia Future Fund.

It will be available to first-home buyers and people who have previously owned a home but have got out of the market after, for example, a divorce and who are struggling to get back in.

It will be available to individuals with a taxable income of up to $90,000 or $120,000 for couples.

Labor hopes the policy will allow Australians on low and middle incomes to get into the housing market. Forty years ago, about 60 per cent of young Australians on lower incomes owned their own home but that figure has plummeted to 28 per cent.

Labor’s housing spokesman Jason Clare said it was “harder to buy, harder to rent and there are more homeless Australians than ever before”.

“This will help a lot of Australians buy a home with a smaller mortgage that they can afford to repay, instead of renting for the rest of their lives,” he said.

The policy is named after a scheme in Britain. Similar programs also operate in Tasmania, Victoria and Western Australia and are about to start operating in NSW.

In 2008, when he was opposition housing spokesman, Scott Morrison called on the Rudd government to introduce a similar policy.

The homebuyer would need to have a deposit of 2 per cent and qualify for a standard home loan with a lender to finance the remainder of the purchase price.

After Albanese caught COVID-19 and was forced to spend seven days in isolation, Labor wants to use Sunday’s launch to kickstart the party’s campaign heading into the final three weeks.

The prime minister said on Saturday that cost-of-living pressures “are real”, and the government was trying to provide relief through the temporary cut to the fuel excise, tax offsets and cuts to the cost of medicines.

But Morrison said the pressures were coming from external events such as Russia’s invasion of Ukraine, COVID-19 and floods.

“We do know that the impacts on inflation are coming from well beyond Australia’s shores,” he said.

“I know Australians are dealing with these cost-of-living pressures … and I know they’re frustrated about cost-of-living pressures.”

Albanese said in Perth on Saturday there was “a cost-of-living crisis in this country, and the epicentre is right here”.

“And we have a government that is so complacent, that is ignoring the rising costs of childcare, the rising costs of food and groceries, the rising costs of living,” he said.

In an interview with The Sun-Herald and The Sunday Age, Bandt said the Greens – which have released a range of policies over the past three years – would narrow their focus to five key issues in the final weeks of the election campaign.

The party has already announced no new coal or gas projects and adding dental care to Medicare as two of those five policy priorities, and affordable housing has now been added as the third.

The Greens’ housing policy is for 1 million publicly owned, affordable homes to be built over 20 years including 125,000 under a shared equity ownership scheme, 125,000 universal-access rental homes and 750,000 new public or community houses.

“We will make the housing-affordability crisis a priority in any balance-of-power discussions. As the most powerful third party in the next parliament, the Greens will be critical to getting things done, we will be needed for any legislation the Coalition opposes [if Labor wins power],” Bandt said.

In 2020, the Morrison government gave eligible first-home buyers a grant of $25,000 to build a home or renovate an existing home. The grant was later extended but lowered to $15,000.

The government has the Home Guarantee Scheme, which supports first-home buyers to buy a property with a deposit as low as 5 per cent, rather than 20 per cent, with the government underwriting the difference.

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