Election 2022: Labor unveils bold housing pitch to voters
Thousands more Australians would be able to afford a home under a landmark proposal that would cut the cost of buying property by up to 40 per cent.
Thousands more Australians would be able to afford a home under a landmark proposal from Labor that would cut the cost of buying property by up to 40 per cent.
The package, dubbed the Help to Buy scheme, was unveiled ahead of Labor’s campaign launch on Sunday and will offer the chance for 10,000 middle income earners to save up to $380,000 off a home.
Help to Buy will cost about $329 million over four years and be made available to Australians who currently don’t own property and who have a taxable income of up to $90,000, or up to $120,000 for couples.
Should Labor be elected on May 21, it would provide eligible homebuyers with an equity contribution of 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.
The homebuyer will need to have a deposit of two per cent and qualify for a standard home loan with a participating lender to finance the remainder of the purchase.
The package will mean an eligible homebuyer living in Sydney – the most unaffordable city in the world after Hong Kong – could save about $380,000 on a new home worth up to $950,000.
Anthony Albanese said Australians needed a government that would “tackle the housing crisis”.
“After nine long years in government, housing affordability has only got worse under the Liberal-National government,” he said.
“Help to Buy is part of Labor’s plan to tackle the housing crisis.”
As of January, the median house price for a house nationwide passed the passed $1 million.
The Help to Buy scheme would make money for the government as it recovered its equity and its share of the capital gain when the house is sold.
Homebuyers will also avoid having to pay Lenders Mortgage Insurance, which, depending on the location of the home, may deliver, an additional saving of more than $30,000.
Opposition Housing and Homelessness Spokesman Jason Clare said the scheme addressed the challenge of buying, which was “harder than ever before”.
“Help to Buy will help Australians buy a home with a smaller deposit, a smaller mortgage and smaller mortgage repayments,” he said.
“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.”
Forty years ago, almost 60 per cent of young Australians on low and modest incomes owned their own home but not only 28 per cent can afford it, according to the Grattan Institute, which called for the national shared equity scheme in February.
In an effort to address the exploding housing unaffordability, the Coalition introduced the Home Loan Guarantee Scheme, which targeted first homebuyers, single parents and others.
The first-home buyer package gave 10,000 young Australians a year the ability to purchase a property with just a five per cent deposit, rather than 10 to 20 per cent, with the government acting as guarantor on the mortgages.
Scott Morrison raised the price caps for houses eligible in the scheme to up to $800,000 in Melbourne and regional Victoria and $900,000 in Sydney and regional NSW.
Concerns have been raised over the debt first homebuyers would be left with after taking up loans of as low as five per cent, particularly if interest rates rise.
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