Election 2022: What the major parties are promising for homebuyers and housing affordability

HomepageNewsElection 2022: What the major parties are promising for homebuyers and housing affordability
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Louise Baxter 16 May 2022

Cost of living dominates much of the federal election conversation as Australians prepare to head to the polls on May 21.

But unlike 2019 – when housing policies led campaign platforms and swayed voters – the major parties have taken a more restrained approach to real estate in 2022.

Liberal-National Coalition housing affordability and homebuyer policies

In its 2022 budget, the Liberal-National Party (LNP) announced policies to help first-home buyers – but has also pledged to support regional areas and affordable housing if re-elected.

The Coalition would also provide an extra $2 billion in low-cost financing to community housing providers for new social and affordable rental dwellings.

Here are the LNP’s main policies and plans for homeownership.

First Home Guarantee Scheme

Formerly known as the First Home Loan Deposit Scheme, the First Home Guarantee Scheme allows eligible first-home buyers to purchase a property with a 5% deposit, instead of the usual 20%, without needing lenders mortgage insurance (LMI).

The government acts as a guarantor to top up the rest of your deposit – for example, a $500,000 home would require $100,000 for a 20% deposit, so if you could contribute $45,000 (5%) the Commonwealth would add the remaining $55,000.

The FHGS can be used in conjunction with state and territory first-home buyer incentives.

There are currently 10,000 spots each year. If re-elected, the LNP would lift it to 35,000 from July 2022 and increase property price caps for the Home Guarantee scheme.

Super Home Buyer scheme

Announced at a campaign event in Brisbane just a week out from the election, Morrison announced the Coalition’s intention to allow first-home buyers to borrow up to 40% of their super to buy property.

Buyers would already need to have saved a minimum of 5% of the property price and would be able to access a maximum of $50,000 to put towards the purchase.

Buyers in this scheme would have to repay the amount taken out plus the percentage increase in the overall price of the home when they sell the property (or they can repay over the course of ownership).

If the property’s value has decreased in this time then this amount would be subtracted from the repayable amount.

This means the balance of their super would drop – potentially even be wiped out if the fall in value was large enough.

Regional Home Guarantee

Announced in the 2022 federal budget, the Regional Home Guarantee is another low-deposit scheme supporting entry to the property market – specifically in regional areas.

This program is open to both first-home buyers and those who haven’t owned a home within the past five years.

Eligible buyers can only use the scheme to buy a new build, not an existing home.

It is scheduled to start in October 2022 with 10,000 places on offer each year. 

Family Home Guarantee

Eligible single parents can build or buy a home with just a 2% deposit under the Family Home Guarantee, which was first announced in the 2021 budget. 

With the government guaranteeing 18% of the deposit, single parents with at least one dependent child can get a leg-up to enter or re-enter the housing market.

In 2022, the number of available places doubled to 5000 per year until 2025.

Only residential purchases are eligible for the scheme, not investment properties.

Downsizer Super Scheme

Announced in the 2021 federal election as an enticement for retirees to free up their larger homes in exchange for a generous tax break if they add it to their super balance, this scheme has been extended again to encourage participants to sell up even earlier.

Previously the Morrison government had extended access to its downsizer contributions scheme by lowering the minimum age from 65 to 60, but it’s now proposing to open it to 55-year-olds if re-elected.

The policy is effectively an extension of an existing tax break which allows up to $300,000 from the sale of a property to be placed into superannuation.

This balance would also be exempt from the assets test for two years (instead of the previous one year), meaning pension amounts can be maximised.

The Morrison government hopes that allowing the extra million people aged between 55-60 to be eligible would entice the scheme to be picked up more widely and lead to more homes being put on the market.

Minister for Housing Michael Sukkar said “we know it’s freeing up more housing stock, those larger family homes for others to be able to purchase.”

Labor housing affordability and homebuyer promises

The Australian Labor Party’s focus for 2022 is safe and affordable housing for all – abandoning its polarising 2019 election campaign platforms around negative gearing and capital gains tax.

Labor has committed to tackling the housing affordability crisis with specific support for regional first home buyers and investment in social housing.

Here are the ALP’s main promises for housing if elected to government.

Help to Buy scheme

Announced as part of their election campaign, the ALP outlined their Help to Buy strategy on April 30.

The scheme aims at helping reduce the cost for homebuyers by way of a government loan of up to 40% of the purchase price of a new property, and up to a maximum of 30% of the purchase price of an existing home.

Homebuyers wouldn’t have to pay rent on the contribution and would aim to buy out the stake on the government’s equity stake in the loan when they’re able to do so.

Taking advantage of such a scheme would mean that buyers would avoid paying LMI, potentially saving tens of thousands of dollars.

Buyers would need to have saved at least 2% towards the deposit.

The scheme isn’t just available for first-time buyers, but any Australian citizen earning $90,000 or less per annum for individuals, or $120,000 or less per annum for couples, who don’t own other properties.

Region Price cap Savings on new home Savings on existing home
NSW metro $950k $380k $285k
NSW regional $600k $240k $180k
Vic metro $850k 340k $225k
Vic regional $550k $220k $165k
QLD metro $650k $260k $195k
QLD regional $500k $200k $150k
WA metro $550k $220k $165k
WA regional $400k $160k $120k
SA metro $550k $220k $165k
SA regional $400k $160k $120k
Tas metro $550k $220k $165k
Tas regional $400k $160k $120k
ACT $600k $240k $180k
NT $550k $220k $165k

Labor has also committed to tackling the housing affordability crisis with specific support for regional first-home buyers and investment in social housing.

Here are the ALP’s main promises for housing if elected to government. Read more about this scheme on the ALP website.

Regional First-Home Buyer Support Scheme

Labor has pledged to help 10,000 first-home buyers per year in regional Australia, which nearly triples the current number who can access a government guarantee scheme.

The Regional First-Home Buyer Support Scheme will cover up to 15% of a deposit for eligible buyers, so residents only need a 5% deposit without paying LMI.

Existing houses, townhouses, and units will be part of the scheme, along with house-and-land packages, off-the-plan apartments, and land with a contract to build. 

The scheme would run until late 2025. Read more on the ALP website.

Housing Australia Future Fund 

The ALP has promised a $10 billion Housing Australia Future Fund, which would build 30,000 new social and affordable housing properties in its first five years.

Each year, investment returns from the fund will be transferred to the National Housing Finance and Investment Corporation (NHFIC) to pay for projects, including:

  • 20,000 social housing properties (with allocations for women and children fleeing domestic and family violence, and older women at risk of homelessness)
  • 10,000 affordable homes for frontline workers like police, nurses, and cleaners.

Funds would also contribute to acute, ongoing housing needs such as crisis and transitional housing, repairs and maintenance within Indigenous communities, and more housing for at-risk veterans.

The Greens: How their policies could help first-home buyers

The Greens want to build one million homes over the next 20 years to level the playing field for homeownership and access to safe accommodation.

Funding for the plan would come from higher taxes on billionaires and big corporations, with that money going into a Federal Housing Trust.

The one million homes would include:

  • 750,000 public and community homes for those on low incomes
  • 125,000 shared equity ownership homes
  • 125,000 universal access rentals for essential workers and other eligible residents.

Cancelling student HECS and HELP debt

The Greens have pledged to wipe student debt and offer free education to balance out the rising cost of living.

Removing HECS and HELP repayments would free up funds to save for a house and reduce liabilities on a home loan.

 
 
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