Government Fast-Tracks First Home Buyer Scheme, Scraps Income Limits
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Australia's federal government has accelerated its expanded first home buyer scheme by three months and eliminated income caps, allowing an estimated 80,000 people to access the program compared to the previous 50,000 limit.
The changes, announced following last week's economic roundtable on housing affordability, represent the government's latest attempt to address the nation's housing crisis. However, housing advocates warn the measures will benefit only a limited number of buyers while failing to address broader affordability challenges.
"This will definitely help the people who can directly access the scheme, but like a lot of the things that this government is doing, it'll help the small number of people who can access it," Maiy Azize, national spokesperson for Everybody's Home, told ABC News Australia.
The expanded scheme removes previous income restrictions that had limited eligibility, though price caps on eligible homes remain in place depending on location. The government has not specified the exact timeline for implementation beyond moving the launch forward by three months from its original schedule.
Limited Impact on Housing Crisis
Despite welcoming the changes for eligible participants, Azize emphasized the scheme's limitations in addressing Australia's broader housing affordability crisis.
"It's not something that's going to make housing more affordable writ large across the country," she said. "The issue is, though, that housing is extremely expensive. That's why we're seeing that people are really struggling to get together deposits."
The scheme maintains regional price caps on eligible properties, which could significantly restrict options in expensive markets. Azize noted that in cities like Sydney, these limits may still present substantial barriers for many potential buyers.
"There are still limits on how much you can spend on the home, you know, depending on the city where you live, that could be quite a big deal," she said.
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Tax Reform Called Priority
Housing advocates are pushing for more comprehensive policy changes, particularly tax reform targeting property investment incentives. Aziz argued that current tax policies favor property investors over first-time buyers, creating unfair competition in the housing market.
"We've got a system at the moment where people who are investing in housing, people who are buying their third, fourth or fifth home, are getting a lot more support from the government than people who are buying their first home," she said.
The tax incentives create direct competition between first-time buyers and investors at auctions and property sales, according to Azize.
"If you're going out to an auction or you're trying to bid for a home, chances are there are investors who are competing with you and they are being subsidised by the government, by the taxpayer I should say, and that is pushing up the cost of housing," she said.
Azize described tax reform as "the really critical thing that has been pushing up house prices for the past 25 years" and said addressing these incentives "would make an enormous difference."
Government Housing Role Expansion Needed
Beyond tax policy, Everybody's Home is advocating for increased government involvement in housing supply, pointing to international examples of successful government-led housing programs.
"When you look around the world at the countries that are doing really well, you know, that have either turned around their housing crisis or managed to avoid it altogether, they are countries where the government is playing a really big role in supplying housing," Azize said.
She emphasized that successful housing markets internationally don't rely solely on private sector solutions.
"They are not just leaving it to the private sector," she said. "So that's one thing we need to see, a really, really big boost to the homes that people can actually afford to buy and to rent."
Rent Control Success in ACT
The Australian Capital Territory's experience with rent increase limits offers a model for national policy, according to Azize, who spoke from Canberra. The ACT maintains the country's lowest rental growth rate due to its rent increase restrictions.
"Here in the ACT, where I'm joining you from, we are the city with the lowest rental growth across the country, and it's because we're the only part of the country that has limits on rent increases," she said.
The rent controls benefit both current renters and prospective buyers by providing financial predictability, Aziz explained.
"That makes an enormous difference to people who are renting long term, but it also makes a difference to people who are looking to buy because they have some predictability, they can save, you know, they're not getting rent increases in the order of 5%, 10% or 15% every year," she said.
Azize identified rent increase limits as a policy that could be "implemented at this sort of pace" and would "make a difference to people immediately."
NSW Housing Development Announcement
The federal scheme expansion comes as state governments announce new housing initiatives. The New South Wales government revealed plans over the weekend to complete the Woollahra train station in Sydney's eastern suburbs alongside 10,000 new homes, some designated as affordable housing.
However, Azize questioned the meaningful impact of these developments, citing vague definitions of affordable housing across Australia.
"Right now across the country there isn't really a definition that governments are using that's very meaningful," she said. "Affordable can just mean slightly less than market rent."
Given Woollahra's location in Sydney's expensive eastern suburbs, Azize expressed skepticism about the actual affordability of the proposed housing.
"If you're living in Sydney, and especially if you're living in somewhere like Woollahra, you know, I think we can expect those to actually be pretty expensive," she said.
Despite these concerns, she acknowledged the positive aspects of well-located housing developments.
"I should say this is good news. You know, well located housing developments are a really good thing. Denser cities are a really good thing. More housing in the right places is a good thing," she said.
Political Context and Expectations
The housing policy changes come as the federal Labor government, which won a substantial majority in the last election, faces pressure to address the housing crisis with its strong parliamentary position.
Azize emphasized the urgency of comprehensive action given the government's electoral mandate.
"Federal Labor, it had a thumping majority in the last election," she noted, highlighting expectations for significant policy changes during the current term.
The government's economic roundtable on housing affordability last week generated discussions about tax reform, though concrete policy commitments beyond the first home buyer scheme expansion remain unclear.
Broader Housing Market Challenges
Australia's housing affordability crisis has intensified over recent years, with rising property prices outpacing wage growth and making homeownership increasingly difficult for younger generations. The deposit requirements alone present significant barriers for many potential buyers, even with government assistance programs.
The expanded first home buyer scheme represents one of several policy tools governments have deployed to address housing accessibility, though critics argue such demand-side measures may contribute to price inflation without addressing supply constraints.
Housing advocates continue pushing for comprehensive reform addressing both supply-side constraints and demand-side pressures, including tax policy changes that have remained politically sensitive despite long-standing calls for reform.
The government has not announced additional housing policy measures beyond the first home buyer scheme expansion, though ongoing discussions about broader affordability solutions continue through various government forums and advisory bodies.
Meanwhile, NAB welcomes the expansion of the Federal Government’s Home Guarantee Scheme (HGS), saying it will help thousands more Australians get into their own homes, sooner.
NAB Executive Home Ownership Matt Dawson said the changes were timely for aspiring buyers.
“We’ve been proud to support the Home Guarantee Scheme since it began because it makes a real difference to those trying to buy their first home,” said Mr Dawson.
“We back these further measures such as removing barriers like income caps and uncapping the number of places available – making the scheme available to all Australian first-home buyers.
“The reality is many people assume they can’t buy a home because they don’t have a 20% deposit. The scheme shows that homeownership can happen much sooner than expected.
“The changes come at the right time, with interest rates easing and more buyers looking to enter the market as we head into the warmer months which typically see increased buyer activity and property listings.
“We look forward to rolling out these changes to customers in the coming months.”
Mr Dawson also noted that while initiatives like the HGS are helping address affordability challenges, boosting supply remains critical to easing the housing crisis.
“It’s important that we continue to see more homes built. Improving supply alongside initiatives like the HGS is key to addressing the housing challenge in Australia.”
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