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Prime Minister Anthony Albanese announced Tuesday the government will immediately remove caps on its first home buyer scheme, allowing all Australians purchasing their first property to access government-backed mortgages with just 5% deposits.
The change takes effect immediately and applies nationwide, scrapping previous income and property price limits that restricted eligibility. Housing Minister Clare O’Neil said the policy will slash the time it takes young Australians to save for a home deposit from 11 years to two or three years in Sydney.
“From today, more young Australians will be able to get the keys to their first home quicker,” Albanese said at a news conference in Sydney’s inner west. “And instead of paying off someone else’s mortgage, they’ll be paying off a home of their own.”
The prime minister said 185,000 Australians have already used the scheme since its introduction, with minimal impact on housing prices. Treasury modelling suggests the expanded program will increase property prices by approximately 0.5% over six years.
“There will be a slight increase in prices, but already 185,000 Australians have benefited from this scheme with minimal impact on prices,” Albanese said. “Treasury did modelling. They suggested a very small increase.”
O’Neil said the policy represents a life-changing opportunity for younger Australians facing a fundamentally different housing market than previous generations.
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“As of today every single first home buyer around the country will be eligible to get into their first home with just a 5% deposit and our government’s backing,” O’Neil said. “This is life-changing stuff and a genuine expansion of home ownership opportunities for that generation of Australians who are facing, you know, such a different housing market than their parents and grandparents faced.”
The housing minister described the initiative as part of Labor’s broader $43 billion Homes for Australia program aimed at building more dwellings, improving conditions for renters and expanding homeownership opportunities.
“We’re building more homes, we’re getting renters a better deal, and today, particularly, we’re getting more young people around our country that amazing opportunity to get into home ownership,” O’Neil said.
The announcement came as Albanese visited the inner west Sydney suburb where he grew up, approximately 1.5 kilometers from his childhood home. The prime minister said his mother lived in public housing for all 65 years of her life, providing family security that shaped his views on housing policy.
“Having that security of public housing that she had made an enormous difference and I’m pleased that the Housing Australia Future Fund is making such a positive difference as well,” Albanese said.
He praised the Inner West Council for approving plans Tuesday night for 30,000 additional dwellings, a measure opposed by Greens councillors but supported by Labor members.
“They understand that we need to boost supply and we need to boost supply particularly in areas such as this that have good access to public transport,” Albanese said.
When questioned whether removing the cap would cause first-time buyers to bid against each other and drive up prices, Albanese and O’Neil emphasized the need for comprehensive housing measures addressing both supply and demand.
“You need to have the full range of measures, and that’s what we’re doing,” Albanese said. “We’re increasing supply.”
O’Neil said the government understands housing affordability challenges require increased construction but rejected delaying assistance to young buyers until supply issues are resolved.
“The Prime Minister and I are not going to look a generation of young people in the eye and tell them that we’re not going to do anything to help them until these supply challenges are resolved,” O’Neil said. “They are facing a fundamental injustice here, a very different housing market than their parents and grandparents faced, and our government is stepping out and giving them a hand to get a better opportunity in the housing market.”
The prime minister defended the policy against suggestions it would leave future generations with higher debt levels, arguing that building home equity early provides better long-term financial outcomes than paying rent.
“Instead of paying someone else’s mortgage for year after year after year, their mortgage is being paid and their debt on that mortgage is being reduced,” Albanese said. “The earlier people can get into home ownership, the more it makes economic sense.”
Albanese cited government figures showing more than 500,000 additional dwellings have been built during his administration, with construction approvals increasing 3% year-on-year.
The government maintains a target of 1.2 million new homes and has allocated $3 billion in incentives for state and territory governments to accelerate housing delivery. Additional measures include build-to-rent schemes encouraging private rental construction and increased social housing funding.
Albanese sharply criticized the opposition for what he called consistent resistance to housing initiatives.
“The opposition opposed the Housing Australia Future Fund. They’re opposing 5% deposits. They opposed the Build to Rent scheme,” Albanese said. “They didn’t bother to have a minister when they were in government and they left us with a supply side problem after 10 years of neglect.”
He said the opposition blocked housing legislation in the Senate during the government’s first term alongside the Greens.
“Every single measure that has been put up, they oppose,” Albanese said.
The prime minister also addressed recent Optus telecommunications failures that disrupted emergency triple-0 services. He said Optus has appointed consulting firm Kearney to conduct an independent review following meetings with Communications Minister Annika Wells.
“This should never have occurred,” Albanese said, adding that the Australian Communications and Media Authority will conduct its own public review.
When asked whether Optus should release its internal reviews publicly, Albanese said transparency serves the company’s interest.
“I think it is in Optus’ interest to restore some confidence,” he said. “Optus have failed their customers and they need to be transparent about these measures.”
Albanese expressed concern about reports that China has halted purchases of Australian iron ore from some producers, calling for markets to operate properly without hindrance.
“I want to see Australian iron ore be able to be exported into China without hindrance,” Albanese said. “It makes a major contribution to China’s economy, but also to Australia’s.”
The prime minister characterized the trade disruption as disappointing but potentially short-term, suggesting price negotiations may be occurring.
“Sometimes when people are negotiating over price, sometimes these things will occur,” he said. “But I want to see this resolved quickly.”
Responding to questions about United Nations experts’ claims that Australia risks complicity in genocide through defense agreements with Israel, Albanese stated categorically that Australia supplies no weapons to Israel.
“We provide no weapons to Israel. None,” Albanese said. “We supply no weapons to Israel. Full stop.”
On electric vehicle road user charges, Albanese noted discussions about such fees occurred during his tenure as infrastructure and transport minister and require coordination with state and territory governments.
“These things need to be worked through with state and territory governments as well,” he said.
The housing policy announcement follows Treasury analysis showing modest price impacts from the scheme’s expansion. Officials project the policy will particularly benefit young families in expensive markets like Sydney, where deposit requirements have historically prevented many renters from transitioning to homeownership.
The government’s broader housing agenda includes renovating existing unoccupied homes, incentivizing build-to-rent developments and increasing social housing construction through the Housing Australia Future Fund, which faced extended delays due to Senate opposition before passing.
Albanese said the fund is “now off and running and going gangbusters, making a difference” after the extended parliamentary battle that involved both Liberal and Greens opposition.
The prime minister emphasized that quality housing and security matter deeply, drawing on his personal experience growing up in public housing to underscore the policy’s importance to families seeking stable accommodation.
“Good quality housing matters. The security of a roof over your head is so important,” Albanese said.
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