The housing policies and promises of Labor and Liberal explained

The two major parties both believe they can solve Australia’s housing crisis. Here we look at the policies and promises they have made.

The election campaign has been full of tall promises from the Liberals and Labor about how to solve the nation’s housing crisis, but how do their promises compare?

Here are the policies and promises made by both parties about housing in Australia.

Labor

• All Australian first home buyers will be able to buy a house with a deposit of 5 per cent under an expansion of the government scheme. The plan includes measures to avoid lender’s mortgage insurance, which adds about $23,000 on average to a first homebuyer’s mortgage.

• Expand the Help to Buy program to help first home buyers by lifting the property price and income caps to make the scheme more accessible.

• Provide $120 million from the National Productivity Fund to incentivise states to remove red tape and help more homes be built faster.

• Introduce a two-year ban on foreign investors buying existing homes.

• Invest $10bn to build up to 100,000 homes for sale only to first home buyers.

• $8.9m to ATO and Treasury to crack down on foreign land banking

• Expand First Home Guarantee scheme so any first-home buyer can purchase a property with only a 5 per cent deposit

• Create a $10 billion fund to support the construction of 100,000 new homes reserved for first home buyers only

What has Anthony Albanese said about housing for Australia?

In the third leaders debate on Tuesday, Prime Minister Anthony Albanese explained three ways Labor’s housing policy will increase home ownership.

“Having a five per cent [home loan] deposit — we know it works … 150,000 Australian families have benefited from it. Instead of families continuing to try and save, to get to that 20 per cent deposit, and they keep going backwards, they never get there because house prices keep increasing. By having a five per cent deposit, it brings it within reach.”

“The second, of course, is reserving 100,000 homes for first-home buyers. That will make a difference. And the third is our Help to Buy scheme, which has worked very effectively in places like Western Australia, which is essentially a shared ownership scheme. So the government can have up to 40 per cent of ownership of a home.”

Mr Albanese also said they would not be making changes to negative gearing.

“We won’t be making the changes … because we’re concerned that it would have a negative impact on supply and would push up rents,” Mr Albanese said.

The prime minister had previously said Labor’s $43 billion Homes for Australia plan will help young people get into the housing market.

What do Australians think about Labor’s housing promises?

According to fresh Newspoll data, 29 per cent of voters nominated Labor as better for helping Australians buy their first home — compared to 24 per cent for the Coalition.

The election campaign has been full of tall promises from the Liberals and Labor about how to solve the nation’s housing crisis, but how do their promises compare? Picture: NewsWIre

Liberals

• Allow first home buyers on low and middle incomes to tax deduct interest payments on mortgages worth up to $650,000 for the first five years of payments

• Implement a two-year ban on foreign investors and temporary residents purchasing existing homes.

• Reduce permanent migration – from 185,000 to 140,000 for two years (then 150,000 in year three and 160,000 in year four).

• Return the refugee and humanitarian program planning level to the long-term average – from 20,000 to 13,750.

• Reduce the numbers of foreign students commencing at public universities by at least 30,000 per year compared with Labor, increase the student visa fee and apply it to foreign students who change education providers.

• $5bn to fund infrastructure to support 500,000 new home builds

• Allowing first homebuyers to access $50,000 from their superannuation for a deposit

• Two-year ban on foreign investors buying existing Australian homes.

• Lower borrowing requirements for first home buyers with lenders mortgage insurance (LMI) saving up to $2500 a year

What has Peter Dutton said about housing for Australia?

In the third leaders debate on Tuesday, Opposition leader Peter Dutton said the Coalition wants to cut migration “so that we can help restore the dream of home ownership”.

“We don’t want (a) big Australia policy, which is putting pressure on infrastructure and every part of our lives,” Mr Dutton said.

Earlier in the debate, he said: “We’re going to cut migration and we’re going to provide support through the tax deductibility to get young people into homes”.

He also ruled out changing the capital gains tax discount and negative gearing.

“We’re not going to change the CGT discount. We’re not going to change negative gearing,” he said.

“I want to make sure that we can have the tax settings in place so that we can encourage investment because young Australians have to rent for a period of time until they can afford to get into their own home. And if we don’t have investors in the market, then we don’t have that rental accommodation and we reduce the stock of housing.”

What do Australians think about Liberals’ housing promises?

Recent polling has shown a five per cent preference toward Labor’s housing policies rather than the Coalition’s, showing there is ground to be made up by Mr Dutton in the leadup to election day.

While both sides of politics have spruiked their policies, younger generations will continue to be locked out of the market unless governments tackle wholesale reform, economists and housing industry specialists said.

Among other ideas, they have called for:

● Fast-tracking housing approvals;

● Constructing more homes;

● Cutting immigration to sustainable levels;

● Abolishing stamp duty; and

● Overhauling tax settings that reward investors over first-home buyers.

AMP chief economist Shane Oliver said the answer lies in increasing housing supply, by overhauling restrictive planning laws and solving labour shortages.

HSBC chief economist Paul Bloxham agreed that addressing supply rather than demand was critical. Reforms to planning would boost construction capacity – as would boosting the availability of workers and materials, he said.

UNSW Professor of Housing Research and Policy Hal Pawson said he was sceptical of the long-term benefit of the first homebuyer programs like the Help to Buy scheme and the First Home Guarantee, which enable people to buy with 5 and 2 per cent deposits, respectively.

Rich Harvey, chief executive of Propertybuyer, said the removal of stamp duty would also assist.

Originally published as The housing policies and promises of Labor and Liberal explained