Brett Warren , National Director – Metropole Group
Australia’s housing market has always been a hot topic, but during elections, it becomes even more of a focal point.
With the major parties recently unveiling policies aimed at first home buyers, it’s clear that housing affordability is once again front and centre.
But what do these plans actually mean for prospective property owners? Let’s break it down in a way that’s easy to digest.
Labor’s approach centres on deposits and accessibility. Imagine this – you’re a first-time buyer eyeing a $1 million Sydney apartment. With their policy, you’d only need a $50,000 deposit, as the government guarantees part of your loan. Not to mention, you’d save a pretty penny by skipping Lenders Mortgage Insurance (LMI).
Labor also promises to invest $10 billion to build up to 100,000 homes exclusively for first home buyers. That’s no small promise – but as we all know, promises in politics can sometimes overshoot reality.
Meanwhile, the Coalition’s offering takes a different route. Their First Home Buyer Mortgage Deductibility Scheme aims to cut costs by allowing tax deductions on mortgage interest for newly built homes – up to $650,000 worth of interest, to be exact.
For an individual earning $120,000 and borrowing $650,000, this could mean a benefit of around $12,000 a year. But the catch? This policy is strictly for new builds, and the size of the benefit varies depending on personal circumstances.
They’re also boosting the Home Guarantee Scheme by raising income and property price caps – offering broader accessibility to would-be homeowners.
So, what’s the big takeaway? Both policies target first home buyers but with very different approaches – Labor’s plan emphasises upfront savings, while the Coalition focuses on reducing ongoing costs.
Each has its merits and potential drawbacks, and much will depend on how these policies translate from paper to action.
For generations, owning a home has symbolised stability, security, and success in Australia.
And, as policies are rolled out, it’s vital for first-time buyers to ask not just what they promise, but how they’ll deliver after the election on the first Saturday in May.
