May 6, 2025 - Noel Jones

Election Result: What It Means for Melbourne’s Real Estate Market

With the 2025 federal election now decided, the focus shifts to what a second term under the Albanese Government will mean for Australia’s housing landscape.

Housing affordability and access were central issues throughout the campaign, reflecting mounting pressure on buyers, renters, and investors across the country. Now, as Labor prepares to implement its housing agenda, many are watching closely to see how their policies will influence the market in the months and years to come.

Let’s break down what Labor’s re-election means for the residential property market.

Universal 5% deposit scheme

Labor is expanding its existing Home Guarantee Scheme, allowing all first-time buyers to purchase a home with just a 5% deposit, eliminating the need for costly Lenders Mortgage Insurance (LMI). Previously, this scheme had income caps and limited availability, however; the new policy removes these restrictions, making homeownership more accessible to a broader range of buyers.

Help to Buy Scheme

Labor is also broadening its Help to Buy Scheme, enabling eligible first-home buyers to enter the property market with a reduced deposit by partnering with the government through a shared equity arrangement. Under the scheme, participants are required to save a minimum deposit of 2% of the property’s value, and the government contributes up to 40% of the property’s value for new builds and 30% for existing homes. The scheme is being expanded with an additional $800 million in funding, bringing the total funding to $6.3 billion. This expansion will make the program accessible to more buyers, increasing homeownership opportunities for Australians.

Expanded housing supply for first-home buyers

Labor has committed $10 billion to deliver 100,000 new homes reserved specifically for first-time buyers over the next ten years. This initiative will be supported by expedited land releases and planning approvals in collaboration with state governments. The goal is to increase the availability of affordable housing in key growth areas, alleviate price pressures in the entry-level market, and provide younger buyers with a quicker path to homeownership.

Increased Commonwealth Rent Assistance (CRA)

In the 25-26 budget, Labor delivered a 45% boost to Commonwealth Rent Assistance, which is the largest consecutive increase in more than three decades. This uplift is aimed at helping over one million households cope with escalating private rental costs, with a strong focus on supporting low-income renters.

Affordable Rental Housing Investment

Under the National Housing Accord, the government allocated $350 million over five years to help deliver 10,000 affordable rental homes. This funding, matched by state and territory governments, is intended to boost the supply of affordable rental options nationwide.

Temporary ban on foreign purchases

The Albanese Government has implemented a two-year ban on foreign investors purchasing existing residential properties in Australia. Effective from April 1, 2025, until March 31, 2027, this policy prohibits foreign persons, including temporary residents and foreign-owned companies, from acquiring established dwellings unless specific exceptions apply. This policy aims to curb speculative activity, relieve pressure on housing demand, and make it easier for Australian buyers to enter the market.

While these initiatives are primarily aimed at improving access to homeownership, they also have the potential to ease pressure in the rental market. As more first-home buyers transition out of the rental sector and into ownership, demand for rental properties is expected to ease, particularly in high-demand areas. Additionally, the construction of new homes through Labor’s supply initiatives will help grow the overall housing stock, which benefits both buyers and renters.

Industry leaders have welcomed Labor’s renewed focus on housing affordability and supply, emphasising the importance of consistent, long-term policy settings. Leanne Pilkington, President of the Real Estate Institute of Australia, noted that the election result reinforced the need for stable and practical housing strategies. “We welcome Labor’s emphasis on supply and affordability. Support for first-home buyers is a vital step toward bridging the generational divide in housing access,” Ms Pilkington said in a recent article published on realestate.com.au

Community Housing Industry Association (CHIA) chief executive Wendy Hayhurst supported these sentiments, agreeing there is an urgent need for action on housing affordability, rental stress and homelessness, and that working together can ensure every Australian has access to a safe, stable and affordable home.

With strong momentum and a clear policy direction, Labor’s re-election marks a promising step forward for housing in Australia. As these initiatives roll out, there is genuine optimism that more people will gain access to affordable, secure, and long-term housing, creating a stronger, more sustainable housing market for all Australians.

At Noel Jones, we’re committed to helping you navigate these uncertain times with expert advice and local insights. Whether you’re looking to buy, sell, or invest in Melbourne real estate, we’re here to support you every step of the way. If you’d like to discuss how the current economic environment could impact your property decisions, don’t hesitate to contact our team.