How Labor plans to assist first home buyers
As housing prices continue to climb, up 3.7% year-on-year in April according to PropTrack, housing affordability remains a key political issue.
With the Labor party now re-elected, what policies can we expect the federal government to introduce to support first home buyers?
More access to 5% deposits
Labor pledged to expand the Home Guarantee Scheme, allowing all first home buyers to purchase a property with as little as a 5% deposit – without paying lenders mortgage insurance (LMI). The federal government acts as a guarantor for up to 15% of the loan, reducing the risk to lenders.
Previously, this program was only available to buyers who earned less than $125,000 a year for singles or $200,000 for couples. There were also limits on the value of property that would be considered.
In its election campaign, Labor said it will remove caps on income and will increase the property caps, opening the scheme up to more buyers.
Expanded ‘Help to Buy’ scheme
The Help to Buy scheme introduces a shared equity model where the government will contribute up to 40% for new homes and 30% for existing homes.
Eligible low and middle-income earners will need just 2% of the value of the property saved for their deposit. This will reduce the mortgage burden, making homeownership attainable for more buyers.
In its 2025-26 federal budget, the Labor government proposed lifting income caps, making the scheme available to around 40,000 buyers a year. Under the expansion, the income caps will be raised to $100,000 for singles and $160,000 for joint applications. The expansion also includes new property price caps. In Sydney, for instance, Labor proposes to allow purchases up to $1.3 million.
Delivery of 100,000 homes for first home buyers
On the supply side, Labor has pledged to invest $10 billion to build 100,000 new homes over the next eight years, exclusively for first home buyers.
Of this, $2 billion would be in the form of grants, and the remaining $8 billion will be for zero-interest loans or equity investments. This, Labor said, is to allow first home buyers to enter the market “with no competition from property investors”.
Details on how the program will be delivered are yet to be finalised, but it is expected to be rolled out with state and territory support.
Ready to take your first step onto the property ladder? With policy shifts now in motion, now could be a good time to explore your options as a first home buyer. As an award-winning mortgage broker in Sydney with over 440 five-star Google reviews, Eventus Financial can help assess your eligibility. Schedule a no-obligation consultation with Alex to get started.
About the author - Alex Veljancevski is a Sydney mortgage broker with Eventus Financial, which assists first home buyers, investors, upgraders and borrowers seeking a better deal on their home loan.