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Clare O’Neil, Minister for Housing and Homelessness, announced on 13 April that a re-elected Labor government would make some drastic changes to support home ownership.
First home buyers would be able to access 5 per cent deposits. They would also be exempt from paying lenders mortgage insurance (LMI).
“The median home price in Australia today is $820,000. Five per cent of that is $41,000. The last time $41,000 covered the 20 per cent deposit for a median home was 2002. That’s the generational scale of this change,” said O’Neil.
“This means a Sydneysider and first home buyer can purchase a $1 million apartment with a $50,000 deposit with their loan guaranteed by the Albanese Government. It means a Queenslander and first home buyer can purchase an $850,000 home with a $42,500 deposit.”
Also announced was a $10 billion investment to build 100,000 homes, available only to first home buyers, in coordination with state governments.
HIA managing director Jocelyn Martin welcomed the announcements, saying that saving for a deposit is a key barrier for first home buyers looking to enter the market.
“In addition to these policies governments need to work together to stop increasing the cost of homes by ensuring all agencies are co-ordinated and focused on reducing the cost of home building,” she said.
“To make inroads into improving housing outcomes across the board, we need bold and effective reforms, and today’s announcement from both major parties outline the types of structural changes and investments needed to support more young Australians get their keys in the door to their own home.”
However, she also questioned the LMI exemption decision.
“Lenders mortgage insurance doesn’t provide a benefit to first home buyers, it is to protect banks. Mortgage arrears in Australia remains exceptionally close to zero and has remained at those levels for decades,” said Martin.
“There is an opportunity to lower the cost of borrowing for a first home buyer without systemic risk to the financial system.”
Caretaker controversy
O’Neil is continuing to introduce housing reforms during the election campaign after asking the opposition to allow policy in the pipeline to be revealed.
In a post on X, O’Neil said: “Yesterday I wrote to the Coalition’s Shadow Housing Minister, Michael Sukkar, asking him to agree to let Housing Australia continue signing contracts during the election campaign so 92 social and affordable housing projects can keep moving.”
The government is supposed to be in caretaker mode, which is a set of administrative practices that guide the government in the lead-up to a federal election. It ensures that the government avoids making major decisions that could bind an incoming government or influence the election outcome unfairly.
Labor has said that there are 92 projects in the later stages of negotiation, part of the Housing Australia Future Fund.
“I am sure you agree that additional social and affordable homes that can be delivered with funds already allocated should go ahead, so more Australians can access secure and affordable housing,” said O’Neil.
The Coalition has responded, with Manager of Opposition Business Michael Sukkar calling the move “embarrassing.”
“This is an embarrassing admission by Clare O'Neil that Labor’s signature housing policies haven't produced a single additional new home in three years, with 340 homes merely ‘acquired and converted’ under the HAFF – not new builds as promised,” he said.
“This letter is a desperate eleventh-hour push by the floundering housing minister to try and get homes approved on the eve of the election and Australians aren’t blind to the fact that this is too little, too late.”
