WITH the Federal Election set for May 3, housing affordability remains one of the most pressing issues for Australians.
Both major parties are offering solutions aimed at helping buyers enter the market, but experts warn these policies could deepen the crisis by increasing demand without addressing the real issue: supply.
Prime Minister Anthony Albanese’s plan allows first-time homebuyers to enter the market with just a 5 per cent deposit. Opposition Leader Peter Dutton’s policy would let buyers use their superannuation as a deposit and make mortgage payments tax-deductible. Economists argue that while these measures increase access, they also drive competition for limited stock, pushing prices up further.
Finder’s Graham Cooke points to negative gearing as a key contributor to the crisis. The tax policy rewards investors who own multiple properties, sidelining first homebuyers. Despite its political risks, Cooke believes reform is essential to shift the market back in favour of owner-occupiers.
Sally Tindall from Canstar argues that a lack of available stock is the fundamental issue. She suggests encouraging downsizing among older homeowners, rezoning well-located suburbs, and reforming tax settings to reduce investor competition. While these steps might reduce prices, Ms Tindall says they’re necessary to improve equity and affordability.
Auctioneer Tom Panos highlights red tape, council delays, and labour shortages as key reasons why developers are reluctant to build. These construction barriers, combined with high immigration rates, are worsening the supply imbalance.
David Thurmond from Mortgage Choice says the pandemic’s economic hangover has made building too expensive.
He notes a dramatic decline in construction loans – from 70 per cent to just 5 per cent of his business – illustrating how unaffordable building has become.
Loan Market CEO David McQueen adds that current lending rules are shutting out buyers. He advocates reducing the APRA serviceability buffer from 3 per cent to make borrowing more accessible.
Meanwhile, realestate.com.au reports that regardless of who wins , a rate cut in May is expected. Markets and banks priced it in just days after the RBA kept the cash rate at 4.1 per cent.
Experts agree: the key to solving the housing crisis lies in fixing supply – not just boosting demand.
