Labor is governing Australia for the first time in almost a decade, with housing affordability high on the agenda. It’s a vastly different property market to 2013, when interest rates were only starting to sink to the historic low we hit last year. The interest rate is now heading back up, with a 0.25 increase already this year and more likely to come.
While the government has limited power over this, new Prime Minister Anthony Albanese has vowed to do what he can to get more Australians into their own homes. This includes rolling out its new Help to Buy scheme for low and middle income earners.
This program will assist up to 10,000 people enter the market every year by giving the government a stake of up to 40 per cent in the new or existing home. The government also takes a share of future capital gains when it’s later sold. In Melbourne, the property price is capped at $850,000. A state Labor version of this already exists in Victoria. Previous homeowners can tap into Help to Buy, provided they have no current stake in property.
Noel Jones Ringwood Director, Brett Freeman, said schemes like this can be a great launching pad for aspiring homeowners. “The security and pride that comes from purchasing a home is wonderful, so we strongly support any government move to make property more accessible,” Brett said. “As always, it’s vital you stop and consider what is the best move for you and your financial future. Diligence and research are a winning recipe.”
The existing Home Guarantee scheme aimed at first homebuyers will also continue under Labor. This enables 50,000 homebuyers a year to purchase a new or existing home with a deposit as low as 5%. The Commonwealth ‘guarantees’ the remaining portion up to 20%. The maximum purchase price will increase from 1 July, with Victoria to be capped at $800,000.
Before the federal election, Labor indicated it supported the Coalition’s proposal to incentivise older Australians to downsize by lowering the age at which they can put house sale proceeds into their super.
“This is intended to free up more homes for young families. We’ll have to wait and see if the new government pursues this,” Brett said. “Demand for quality family homes in Melbourne is generally strong so I’m sure many aspiring buyers would welcome a push for new stock on the market.”
Prime Minister Albanese will establish a National Housing Supply and Affordability Council, which will work with state governments to set targets for land supply and collect national data on housing supply, demand and affordability. The new government will also start a $10 billion Housing Australia Future Fund, using the returns to build social housing across Australia. It has estimated 30,000 homes can be built in five years.
Labor believes this move to increase supply would relieve pressure in the rental market, which has a very low vacancy rate following the pandemic. Experts are calling for Labor to go even further to meet the demand for housing, with overseas migration expected to grow in the coming years.
Contact your local Noel Jones office for expert guidance on your property journey.
