We asked young Sydneysiders about Labor and the Coalition’s housing plans. They weren’t impressed

Young Sydneysiders aren’t earning enough to benefit from either the Coalition or Labor’s housing policies, even if they can stump up a deposit.

“When I look at how much I need to be earning, it’s not enough to buy the average home in Sydney,” urban planning student Zachary Moore said. “I’d struggle to buy the average apartment in Sydney, and that’s even in a scenario where you are completely debt-free, and you’re earning well above what the average person is.”

Young Sydneysiders gave their thoughts on Liberal and Labor housing policies: Matthew Thrum, Greens councillor Bonnie Harvey, Labor councillor Dexter Gordon, Zachary Moore, and Liberal councillor James Ardouin. Credit: Nick Moir, Louie Douvis, Dominic Lorrimer

With both major parties promising to make it easier to afford a home, the issue remains for single Sydneysiders that their borrowing power on an average salary just can’t meet the sky-high property prices.

Under Labor, first home buyers can enter the market with a 5 per cent deposit, with the government guaranteeing the rest of the usual 20 per cent. The Coalition wants to let buyers withdraw money from their super, and to make interest payments tax-deductible for the first five years for newly built homes.

Both parties are promising massive projects. Labor has committed $10 billion to build 100,000 homes for first home buyers, on top of 1.2 million homes by the end of the decade. The Coalition, meanwhile, has promised to invest $5 billion to deliver infrastructure at development sites, which it claims will deliver 500,000 new homes.

The Sydney Morning Herald spoke to young people across the political spectrum who want to fix Sydney’s housing crisis, who said younger generations were pessimistic about their chances of owning a home in the city they live in.

Even with measures to lower the initial deposit needed to buy a home, the median price of a home in Sydney is $851,000 for a unit and $1.4 million for a house, according to NAB.

For a single person earning $90,000 with no debt on a 30-year variable rate loan, their borrowing power with most major banks is around $470,000. If you’re in a couple, you’re in with a much better chance – around $880,000.

That’s assuming you don’t have a HECS debt. A Compare the Market report found that student debts can shrink a buyer’s borrowing capacity by up to $100,000.

“Across the board, with each of these pitches that’s been put forward, undoubtedly they will be beneficial for a number of individuals, but I don’t think any of them are really going to do much for the system or the broader problem,” 23-year-old senior urbanist at Ethos Urban, Matthew Thrum, said.

Thrum believes investment for new builds is a good step in the right direction but was disappointed to see a lack of bold tax reforms such as tinkering with negative gearing and capital gains tax discounts.

Even some of the youngest representatives of the big political parties – young Greens, Labor and Liberal councillors – can all agree that young people feel defeated about their home ownership prospects.

“It’s pretty clear that when we support the wages of young people across industry, and re-establish the social contract that young people are told – that when you study hard and get a degree, you get a higher paying job – that is a way to address the borrowing power issue,” Randwick Labor councillor Dexter Gordon said.

Lowering the deposit needed for a home removes a huge barrier to entry. A 5 per cent deposit on a $851,000 unit in Sydney would require a first home buyer to save up $42,550, as opposed to $170,200 under a 20 per cent deposit.

Bonnie Harvey, a young Greens councillor and federal candidate from Northern Beaches Council, said she was worried this would just drive up prices.

“These policies feel like sticking a cork in a sinking ship … these reforms are going to spike demand, and young people will be left in a similar situation. The market got us into this mess; it won’t get us out,” she said.

James Ardouin, a 25-year-old Liberal councillor in Woollahra, wants to see more done to reduce the impact of HECS on young people’s borrowing power.

“We’ve allowed housing prices to increase at a rate that’s not commensurate with incomes increasing. There’s been a deficit of action in the last 10 years, and I think most people would be in agreeance that this is something that needs urgent action.”

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