| The Federal Election is just around the corner on the 3rd of May, so we are well and truly in the thick of ‘promise’ season. Housing is a key issue in this Election, with affordability and availability problems rising by the day. In this month’s Market Update, we’ve simply tabled the Housing promises of each major party. Now, historically speaking not all of these promises will actually be delivered, so take it all in with a pinch of salt.
Labor Housing Election Promises
| 100,000 new homes for first home buyers |
Labor has committed $10 billion to build 100,000 homes over eight years, exclusively for purchase by first home buyers. They would be built in partnership with state developers. |
| 5 per cent deposits for first home buyers |
Income limits under the First Home Buyers Guarantee would be abolished, allowing any first home buyer to purchase a home with just a 5 per cent deposit without having to pay Lenders Mortgage Insurance, and eligible property prices lifted. |
| Help to buy scheme |
Eligibility to use the Help to Buy scheme, where the government covers up to 40 per cent of a home’s cost that first home buyers can buy out at a later date, would be expanded. |
| Build to rent |
Property developers can access tax incentives to build apartments with a portion of units rented “affordably” below market rate. |
| Apprentice incentive payments |
Payments up to $5,000 would be made to apprentices in priority areas, including construction, who complete their first year of training. |
| Foreign investor ban |
Foreign buyers would be temporarily banned from Australia’s housing market for two years. |
| Housing Australia Future Fund |
A $10 billion program to build 30,000 social and affordable homes would continue to be rolled out over the next term of parliament. |
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Coalition Housing Election Promises
| Tax deductions on mortgage interest payments |
First home buyers will be able to claim mortgage interest payments on their taxes for new build homes. Interest paid on the first $650,000 of a mortgage would be deducted from a person’s assessable income. |
| 5 per cent deposit boost |
Expand who can access the Home Guarantee Scheme, which allows people to buy a home with a 5 per cent deposit without facing a lenders insurance penalty. Income caps would be lifted and eligible property caps increased. |
| Scrap the ‘HAFF’ |
Abolish Labor’s $10 billion Housing Australia Future Fund, which was set up to fund the development of 30,000 social and affordable homes. |
| Housing infrastructure fund |
A $5 billion fund to pay for enabling infrastructure at housing developments, such as streets and sewage, would help to accelerate the development of 500,000 homes. |
| Access to superannuation for housing |
First home buyers would be able to access up to $50,000 from their super to pay down a deposit for a home. |
| Construction code freeze |
Changes to the National Construction Code would be frozen for ten years, which the Coalition says would provide investors more certainty. |
| Foreign investor ban |
Foreign buyers would be temporarily banned from Australia’s housing market for two years. |
| Migration cuts |
Reduce net migration by 100,000 people from its current forecast of 260,000, including by cutting international student levels. |
| Tradie incentive payments |
A two-year incentive payment of $12,000 to employers to subsidise construction worker wages. |
In the event of a hung parliament, the minor parties and independents will have some capacity to shape Australia’s Housing future.
The Greens are calling for reforms to negative gearing and the capital gains tax. They propose that existing investors who negatively gear properties will be allowed to continue doing so, but new investors will only be allowed to negatively gear one property in the future. Capital Gains Tax would be phased out. The minor party is also pledging to freeze rents for two years, then cap future increases at 2 per cent every two years.
Of course there are many other key issues to carefully consider in this Election. As your dedicated Finance Broker, we urge you to take the time to familiarise yourself on the Housing promises which will have a major influence on who is elected this May.
Next RBA Meeting
The RBA is set to meet again in May, with the next Monetary Decision to be released on May 20. All four of the Big Banks have cut their term deposit interest rates in anticipation of a 0.25 basis point Cash Rate reduction, a strong indicator that a rate cut will eventuate this time around. With the US Government causing market chaos, it is expected that the Cash Rate will continue to be slashed across 2025. |
