What are the major parties' housing policies?

Housing affordability looks set to be one of the defining issues of the forthcoming election campaign. According to research tank Ipsos, housing was the second most pressing concern among Australian voters in January, above the economy, healthcare, and crime. Home ownership rates have been steadily declining for decades and across the political spectrum there's a broad consensus more needs to be done to change that.

With the election now confirmed for 3 May, the next couple of months will probably see plenty of thunderous rhetoric from both sides about the 'housing crisis', but what actual policies are the Government and the Opposition putting forward? We've broken down what the major parties have told us about their respective housing plans to help you decide which you prefer.

How will Labor improve housing affordability?

Along with the help to buy scheme introduced late last year, Labor want to address housing affordability by increasing residential construction levels.

Housing Minister Clare O'Neil told the Savings Tip Jar podcast the Government is focused on the supply side of the housing equation.

"The fundamental problem we have here is we're not building homes quickly enough…we came to Government after a decade of genuine neglect of this problem," she said.

In what will likely be often repeated throughout the campaign, she pointed to the Housing Accord the Government made in 2023 with all states and territories, setting the ambitious target of 1.2 million new homes over the five years from July last year.

"We've set a target because we need to be bold and ambitious and we need to galvanize every level of government in every part of our country to really take this problem seriously," she told the podcast.

"We need to build more homes in our country because more homes means more affordable housing for Australians."

Shared equity

One of the major new initiatives introduced during Ms O'Neil's time as housing minister has been the Help to Buy Scheme. This is a shared equity scheme under which the Government will contribute a portion of the purchase price for eligible home buyers. Those buying a new home can receive an equity contribution of up to 40% while the maximum for existing properties is 30%. Home owners can then buy back the portion of the property owned by the Government once they are able to. If the property is sold, the Government is entitled to its portion based on the value of the property at the time of sale.

The 25/26 budget reaffirmed the Government's commitment to this policy, lifting the income and property price caps to allow more Australians to benefit.

Help to Buy passed both houses of parliament last year so it will likely be going ahead regardless of the election, but the Coalition aren't crazy about it.

"History tells us most Australians don't view [owning a home with the Government] as something they aspire to," Shadow Housing Minister Michael Sukkar told the Tip Jar last year.

Freeze overseas investment on established properties

One policy Labor and the Coalition are in unison about is a temporary pause on overseas investors buying established properties in Australia.

Mr Dutton has been pushing this for a while, and in February Jim Chalmers announced Labor will be introducing this ban from 1 April, until at least 31 March 2027.

"This is all about easing pressure on our housing market at the same time as we build more homes," he said.

How will the Coalition improve housing affordability?

You wouldn't think it from the vitriolic and often personal attacks of recent election cycles, but on many issues Labor and the Coalition aren't actually that far apart. Housing is a great example. On his recent appearance on the Savings Tip Jar, Shadow Treasurer Angus Taylor made some remarks that sound pretty similar to what Ms O'Neil said late last year.

"The most important thing is to get supply moving, it is grinding to a halt," Mr Taylor said.

"If you haven't got the supply, people are not going to [be able] to own a home."

Although there are differences in their respective remedies (which we'll get to shortly) the Government and the Opposition are in unison that improving construction outcomes is central to improving housing affordability. However, the Coalition intends to emphasise a couple of other policy points that also address housing affordability.

Super home buyer scheme

A major point of difference between the two parties is the Coalition's proposal to allow budding homeowners to dip into their superannuation to buy. First suggested in 2022, this would allow first home buyers to withdraw up to $50,000 of their super balance as a deposit, provided this amount (as well as any capital gains) goes back in once the property is sold.

Mr Taylor confirmed this is something the Coalition remains committed to.

"It's bizarre that our superannuation money can be spent or invested on anyone's house except your own," he told the podcast.

"We know property and housing is a really important part of someone's investment portfolio, we also know the best indicator of whether someone's going to have a good retirement isn't just the superannuation they've got, but whether they own a home."

Ms O'Neil and Labor claim this will just drive up prices.

"If all young people have access to their super all we're doing is effectively raising house prices by the amount that they can borrow," she told the Savings Tip Jar.

Modelling from the University of South Australia found this proposal could increase prices by between 7.4% and 10.3%.

Mr Taylor conceded this scheme would increase demand, but that the Coalition's other proposals, on both the supply and demand side of the equation, would more than offset this.

"If we can release demand [from foreigners] and add to supply, we think it's fine to be giving people more choice about how they use their superannuation," he explained.

Reduce immigration

Opposition Leader Peter Dutton has pledged to cut permanent migration by 25% if he takes office as well as blocking foreign investors from buying existing Australian property. Mr Taylor told the podcast this will help reduce "unnecessary demand" pushing up property prices.

"We do think that foreign investment demand and a record rate of immigration…is adding to demand," he told the podcast.

Will Labor or the Coalition build more homes?

Both parties agree that building more homes is key to improving housing affordability. Labor announced the National Housing Accord in 2023, which set a target for the nation to build 1.2 million new homes over five years. Some aspects of this were criticised by the Coalition - perhaps most prominently the $10 billion Housing Investment Fund that is supposed to pay for a lot of it, which Peter Dutton in the budget reply speech said the Coalition will abolish if elected.

Nevertheless, Mr Dutton and the Opposition are clear they are also committed to drastically improving residential construction.

The first quarter of the National Housing Accord was the three months to September 2024, and it isn't great reading so far.

Matt Kandelaars, the Australian Property Council's group executive for policy and advocacy, said it isn't a surprise things are behind schedule.

"I don't think anyone expected that from day one we'd be hitting those targets, it will take a little time to ramp up," he told the Savings Tip Jar.

"There is a lot of work that is happening [and] far more that needs to happen."

Improving the construction sector: Labor v the Coalition

One way Labor plan to improve residential construction is to increase the amount of qualified tradespeople available. In 2023, the Albanese Government introduced fee-free TAFE for certain courses deemed to have a skills shortage, including construction, while it also intends to give apprentice tradies an extra $10,000 if re-elected.

The Coalition on the other hand are putting the focus on getting rid of red tape, and as Mr Taylor told the podcast, making sure "union officials can't control the construction side of the housing industry."

"We haven't got the basics right…[like] making sure the CFMEU behaves the right way when it comes to big construction projects," he said.

Investigations in 2024 revealed significant corruption within the CFMEU, one of the major donators of the Labor party.

Where should new homes be built?

Another difference between the two parties is where the major impetus should be for new construction in terms of location. For Labor, high density development in the inner city appears to be the target. Ms O'Neil said the Government is pushing for "planning reform" at the state level.

"What we know about the solution to this housing crisis is that it's going to require some greenfield development at the edges of our cities, but it is also going to require us building up in parts of our cities where we know that lots of people want to live," Ms O'Neil told the podcast.

Meanwhile, the opposition have pledged $5 billion towards what Peter Dutton calls "enabling" infrastructure, to include water, power, sewage and access roads. That would seem to suggest that developments further from the city centre in emerging suburbs are to be the Coalition's focus, which has been backed up by recent rhetoric.

"Our expectation…is that the greatest opportunities are now greenfield sites in detached housing," Mr Sukkar told ABC Radio last year.

Who should I vote for affordable housing?

No amount of modelling can fully predict whether Labor or the Coalition have a better plan to improve housing affordability. You might have your own opinions on the economics of the respective proposals, but we won't know for sure which will have the preferable outcome until we give one of them a try.

Many of these policies can also be compared on values and ideals. Take the Opposition's proposal to allow budding home owners to dip into their super to buy. If you agree with Angus Taylor that choice is vital, and young people should have the option to decide whether they want to keep everything in super or use those savings to buy a home, you might prefer the Coalitions plan. If on the other hand you think it's wrong for young people to dip into their retirement savings - arguably transferring some of their future wealth to existing home owners - you might vote for Labor. Other issues - unions for example, or immigration - you might already have pretty strong partisan opinions on that a single election campaign isn't likely to change.

The one piece of advice we can give is to try to separate the concrete proposals from the bluster of political rhetoric. Discerning the actual differences in policy is usually the best way to make an informed decision at the ballot box.

Picture from Maximillian Conacher on Unsplash

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