Housing affordability is a defining issue in Australia’s 2025 federal election. Both major parties – the incumbent Labor government and the opposition Liberal-National Coalition have unveiled ambitious housing policies aimed at tackling the crisis. These plans focus heavily on helping first-home buyers and increasing housing supply, reflecting mounting public pressure from younger generations of voters. This article provides an in-depth comparison of the two parties’ proposals, examining their content, the pros and cons of each approach, the likelihood of implementation (given each party’s track record), and an assessment of their impact across key metrics.
Neither Labor’s nor the Coalition’s plan is expected to dramatically lower property prices in the short term, and one expert warns the Coalition’s tax changes for mortgages could even have “some inflationary impact” on house prices. Nonetheless, the policies differ in significant ways. Below, we break down what each side is promising and how those promises stack up.
Overview of 2025 Housing Policy Proposals
Both Labor and the Coalition have put housing front and center in their 2025 campaign platforms. The following is a summary of the key measures each party is proposing:
Labor Party’s Housing Platform
- 5% Deposit Guarantee for All First-Home Buyers: A re-elected Labor government would allow every Australian first-home buyer to purchase with only a 5% deposit, without paying Lenders Mortgage Insurance (LMI). This is a major expansion of an existing federal guarantee scheme, removing previous income and quota caps. The government would guarantee up to 15% of the loan value so that buyers with 5% down can avoid the usual 20% deposit requirement. For example, Labor notes that a Sydneysider could buy a $1 million home with a $50,000 deposit under this plan (the government guaranteeing the rest). This cuts years off the time needed to save a deposit and saves around $23,000 in LMI costs for the average buyer.
- $10 Billion for 100,000 Affordable Starter Homes: Labor will invest $10 billion to build up to 100,000 new homes, exclusively for first-home buyers. These homes, to be delivered in partnership with state governments, community housing providers and industry, will be sold at cost price to first-time buyers only. The construction would be phased over eight years, with planning to commence “day one” in coordination with the states on land release and development approvals. By reserving these houses for first-home buyers, Labor argues “those first home buyers won’t be competing with property investors or older generations” for these new dwellings. Eligibility will require the purchaser to be an Australian citizen, a genuine first-home buyer, and an owner-occupier; some income testing may also apply to target those in need.
- Context – Ongoing Affordable Housing Initiatives: In addition to the new promises above, Labor points to its broader housing agenda from its first term. This includes the recently passed Housing Australia Future Fund (HAFF) – a $10 billion fund to finance 30,000 new social and affordable rental homes in five years – and increased Commonwealth Rent Assistance for low-income renters (a 15% boost in 2023, with a total 45% increase projected when fully implemented). The government touts that it is “delivering 55,000 social and affordable homes” (28,000 already underway) through various programs, marking the largest public housing construction effort since the post-war era. These longer-term efforts form the backdrop to Labor’s 2025 pitch, although the election promises themselves are centred on first-home ownership rather than rental relief.
Coalition (Liberal-National) Party’s Housing Platform
- Tax-Deductible Mortgage Interest for First-Home Buyers: The Coalition’s headline proposal is a “first home buyers mortgage deduction scheme” that would allow first-time buyers of newly built homes to deduct the interest paid on their mortgage from their income tax for the first five years. This would be a historic change to Australia’s tax system – effectively treating owner-occupier home loans a bit like investment loans for a limited time. The deduction would be limited to the interest on the first $650,000 of the mortgage principal and would only last for five years. It would also be means-tested to middle incomes – available to singles earning up to $175,000 or couples up to $250,000, and only for those buying their first home to live in. The Coalition estimates that a family on a $120,000 income with a $650,000 loan could save about $11,000 per year in tax (roughly $55,000 over five years) under this scheme. They argue this bold tax concession will help young buyers “get the firepower” to enter the market and boost new housing construction. (Notably, in countries that allow mortgage interest deductions, governments often tax a portion of any capital gains on the home sale, something the Coalition explicitly is not proposing – they vow no changes to capital gains tax or negative gearing rules that favour property investors.)
- Superannuation Access for Home Purchases: Reviving a policy they proposed in 2022, a Coalition government would allow first-home buyers to withdraw up to $50,000 from their superannuation savings to put toward a house deposit. Withdrawals under this “home super saver” scheme would need to be paid back into super when the house is sold, ensuring it functions like a temporary loan from one’s retirement fund. The aim is to break down the deposit barrier by letting young people leverage their super for a home purchase. (Labor opposes this idea, arguing it undermines retirement savings and could further inflate prices, but it remains a core Coalition offer to aspiring homeowners.)
- Housing Supply Acceleration (Infrastructure and Red-Tape Cuts): The Coalition criticises Labor for presiding over a slump in housing construction and blames factors like excessive migration and regulation for outstripping supply. In response, they promise a suite of measures to boost housing supply:
- $5 billion Housing Infrastructure Fund: The Coalition pledges to “swiftly unlock up to 500,000 new homes” by investing in the infrastructure that enables housing developments. This $5b fund would help states and councils build the roads, water pipes, sewerage, and utilities needed to open up new land for housing. By removing infrastructure bottlenecks, hundreds of thousands of housing lots (particularly on city fringes or regional growth areas) could be brought to market faster than they otherwise would.
- Freeze on New Housing Regulations: To reduce construction costs, a Coalition government would impose a 10-year freeze on any further changes to the National Construction Code or other “red tape” that adds compliance costs. They cite recent Labor-endorsed code updates (such as energy efficiency and accessibility standards) as adding up to $60,000 to the cost of a new home. Halting new regulations would provide certainty and lower costs for builders and developers. The Coalition also vows to crack down on construction-sector union “corruption” and even deregister the CFMEU (the construction union) to improve productivity and lower building costs. Additionally, they plan to train 400,000 new apprentices and tradespeople to alleviate skilled labor shortages in construction – a critical capacity issue if housing construction is to ramp up.
- Reducing Demand Pressures (Immigration and Foreign Buyers): A significant difference in the Coalition’s approach is tackling the demand side of housing by temporarily slowing immigration and foreign investment. Arguing that record population growth under Labor has fuelled housing demand far beyond supply, the Coalition would:
- Reduce Net Overseas Migration from the current 185,000 per year to 140,000 for each of the next two years (then gradually back up to 160,000 by the fourth year). They also propose cutting the annual humanitarian intake from 20,000 to 13,750. Fewer new residents means less immediate competition for housing. By Coalition estimates, rebalancing the migration program could “free up almost 40,000 additional homes in the first year” by easing demand – a questionable figure, but it underscores their intent to take pressure off the housing market.
- Ban Foreign Buyers of Existing Homes: The Coalition would implement a two-year ban on foreign investors and temporary residents purchasing existing residential properties. This is aimed at preventing overseas speculative demand from driving up prices, at least in the near term. (Foreign investment in new developments would presumably still be allowed to encourage construction, as is often the case with such policies.)
In sum, the Coalition’s housing platform leans on market incentives and removing obstacles: a generous tax break to spur first-home purchases (but only for new builds), unlocking land for private development, curbing what they see as excess demand, and maintaining investor-friendly tax settings. Labor’s plan, by contrast, involves direct government investment in building homes and expanding an existing guarantee scheme to help buyers save on upfront costs. These differing philosophies carry various advantages and downsides, which we explore next.
Positives and Negatives of Each Party’s Approach
Both plans have drawn praise for their ambition and criticism for their potential side effects. We will examine each party’s policies in terms of their likely impact on affordability, housing supply, feasibility of implementation, and social equity, highlighting the pros and cons of each.
Affordability Impact (Will Housing Become More Affordable?)
One of the biggest concerns for Australians is whether these policies will actually make housing more affordable, either by slowing the growth of home prices or easing rent pressures. On this front, experts suggest neither party’s plan will significantly reduce house prices overall in the short term. However, the mechanisms differ:
Labor: By pledging to build affordable homes and help first-home buyers, Labor hopes to improve affordability both by increasing supply and by lowering purchase barriers. The benefit of their 100,000 affordable homes plan is that those particular houses will be sold at-cost (no developer markup), meaning eligible first-home buyers could save an estimated 20–25% off the market price compared to buying a similar home from a private developer. That directly improves affordability for the buyers of those homes. Additionally, more supply in the “affordable” segment should, at least slightly, ease price pressures in the broader market. Housing experts like Hal Pawson of UNSW note Labor’s 100,000 homes would have “some beneficial effect on overall house prices” – though 100k dwellings over eight years is not enough to transform the market given the roughly 1.2 million new homes Australia needs by 2029. On the other hand, Labor’s expanded 5% deposit guarantee boosts demand by enabling many more people to buy earlier than they otherwise could. Economist Saul Eslake cautions that lowering deposit requirements tends to “drive up house prices” by increasing buyers’ purchasing power. Essentially, more buyers chasing a limited stock of homes can bid prices higher – potentially offsetting some of the affordability gains. Labor Housing Minister Clare O’Neil insists the impact on prices will be “not significant,” but even Labor’s deposit plan, Eslake says, “will have a similar effect” on stoking demand as the Coalition’s tax-deduction scheme. Net effect: Labor’s construction program should modestly improve affordability in the long run (especially for those who get one of the cost-price houses), but in the near term the easier credit for first-home buyers could nudge prices upward for entry-level properties. Overall, Labor’s focus on supply suggests a slight positive for affordability, albeit limited by scale.
Coalition: The Coalition’s plan has a more mixed impact on affordability. Their proposed mortgage interest tax deduction for first-home buyers is essentially a new subsidy to demand: it increases what eligible buyers can afford, which “results in higher home prices, not higher rates of home ownership,” according to Eslake. By making the after-tax cost of mortgages cheaper (analogous to a targeted interest rate cut for first-home buyers), it risks bidding up prices on new houses in particular. The saving grace is that the scheme is restricted to newly built homes only – a design choice housing analysts find “sensible” because it directs demand into adding supply, rather than inflating existing home prices. If successful, this could stimulate construction (we’ll discuss supply shortly) and avoid simply creating a price spike in established suburbs. Still, even within the new-home market, prices could rise, knowing buyers have an $11k/year tax break. The Grattan Institute’s CEO, Dr. Aruna Sathanapally, warns the policy “adds to demand in the housing market, adding more income tax concessions that hollow out our tax base, and [sends] more tax breaks to high-income earners” – in her view, the “wrong direction” for housing affordability and tax fairness alike.
On the flip side, the Coalition’s measures to curb demand could improve affordability, particularly in the rental market. By temporarily slashing immigration numbers and banning foreign purchases of existing homes, the Coalition aims to reduce competition for housing. Fewer new residents means less new demand for rentals and first-home purchases, which could take pressure off rents and prices at the margins. For example, if indeed 40,000 fewer homes are needed in the first year (as the Coalition estimates) due to migration cuts, that could slightly cool the market. However, these demand-side restrictions are short-term and somewhat blunt instruments; Australia’s structural housing affordability issues ultimately depend more on supply catching up with population growth.
Bottom line – Affordability: Neither party is offering a magic bullet to bring house prices down in the short term. Labor’s plan leans on increasing affordable supply (a positive for affordability) but also stimulates buyer demand through easier access to credit (a potential negative). The Coalition’s plan heavily stimulates demand for new houses via tax breaks (which could inflate prices for those homes), while also attempting to restrain other demand through migration policy (which could ease price growth somewhat). As one summary put it, “Neither plan will put significant downward pressure on property prices” overall. At best, these policies might slow the pace of price increases or make housing more attainable for certain groups, but housing affordability is likely to remain challenging without broader measures.
Housing Supply and Construction
Increasing the supply of homes is widely seen as crucial to addressing Australia’s housing shortage. Here, the two platforms diverge in approach: Labor directly funds home construction, whereas the Coalition emphasises incentivising and facilitating private sector construction.
Labor: The promise to build 100,000 homes for first-home buyers marks a significant government intervention in housing supply. This harks back to post-World War II times when governments directly built large numbers of homes to boost ownership and alleviate shortages. Experts have welcomed this aspect of Labor’s plan – Hal Pawson calls it “a big deal” and notes that governments stepping up construction is something housing experts “have been calling for” to meet ambitious national targets. The benefit of public-led development is that homes can be delivered where and when they are most needed, and sold at below-market prices (since profit is not the motive). Labor’s plan to coordinate with states to fast-track land release and use public developers could help overcome some of the planning delays that plague private developments. It also guarantees that a chunk of new supply is in the “affordable” category, which the market on its own has failed to provide in sufficient numbers.
However, 100,000 homes over eight years, while helpful, is relatively modest in the context of Australia’s housing needs – it averages 12,500 homes per year, in a country that needs roughly 200,000+ new dwellings per year to meet demand. Pawson observes that this would “still leave Australia short” of the national target of 1.2 million total new homes by 2029. In other words, it’s a start, but not a complete solution. There are also execution risks: building this many homes will depend on the capacity of the construction industry (materials, labor, etc.) and the cooperation of state governments (who control zoning and planning approvals). Labor points out that building approvals are already trending up again and labor shortages are easing, and it has initiatives to support construction skills, but delivering 100k homes will still be a complex task.
Aside from the 100k homes, Labor’s broader housing accord with states aspires to facilitate that 1.2 million homes target, and the HAFF will contribute 30k social/affordable rentals. These additional moves could indirectly support supply by leveraging institutional investment in housing. Overall, Labor’s approach prioritises direct supply additions at the affordable end – a clear positive – but its scale may be constrained by practical limits, and it will take years for the full benefit to materialise.
Coalition: The Coalition’s strategy is to unleash and accelerate private sector supply. The $5 billion housing infrastructure fund is a potentially impactful policy: often new housing projects (especially large greenfield suburbs) are delayed or scrapped because local governments can’t afford the upfront infrastructure. By providing federal money to build the necessary pipes, roads, and utilities, the Coalition claims it can “swiftly unlock” up to 500,000 home sites that would eventually be developed. If that number is realised, it would be a huge boost, essentially enabling the market to build five times the number of homes Labor is directly building (though likely over a longer horizon).
The advantage here is leveraging private capital: the government funds the infrastructure, and then private developers and builders can construct the houses with less cost burden. This approach could yield a lot of housing without the government having to oversee each home’s construction. It also works hand-in-hand with the Coalition’s mortgage interest scheme: by creating more buyer demand specifically for new builds, the policy incentivises builders to produce more housing, knowing buyers have extra incentive to purchase new properties.
The Coalition is also tackling some supply-side friction points. Freezing the building code could prevent well-intentioned but costly new standards from slowing down new projects (builders had warned that continual code changes add to delays and costs). Training 400,000 apprentices would address the chronic skilled trade shortage, making it more feasible to ramp up construction quickly. Cracking down on unlawful union activity in construction might (in theory) reduce project costs and delays, though the degree of impact is debated, and such moves could face industrial backlash. Moreover, by reducing migration for a couple of years, the Coalition’s plan might actually create a window where housing construction can catch up to population growth, essentially lowering the bar that supply needs to meet in the short term.
The question mark on the Coalition’s supply plan is whether the numbers add up. “Unlocking” 500,000 home sites does not guarantee those homes get built promptly – developers will only build if there’s sufficient demand and financing. If the economy slows or if interest rates remain high, private construction might still lag. Past federal initiatives to spur housing supply (like the Abbott/Turnbull government’s city deals or housing infrastructure facility) were on a much smaller scale; this $5b proposal is more aggressive, but it remains to be seen if it would indeed yield hundreds of thousands of homes or simply improve the viability of already-planned projects. In short, the Coalition is betting on the market, giving it stimulus (tax breaks for new-home buyers) and removing shackles (infrastructure, training, less red tape) – to deliver the needed supply.
Bottom line – Supply: Labor directly adds a known quantity of affordable homes, which is a sure boost to supply (albeit a modest fraction of what’s needed) and ensures those units reach the people who need them. The Coalition’s plan has a potentially larger upside for overall housing numbers by mobilising the private sector, but it’s less guaranteed – it creates conditions for supply to grow, but relies on follow-through by industry and favourable economic conditions. Many experts agree more supply is essential; Labor commits public funds to that cause, while the Coalition offers a broad toolkit to encourage private construction. Ideally, both demand sustained effort beyond a single electoral cycle to truly close the housing gap.
Feasibility and Track Record (Will They Do What They Say?)
A policy is only valuable if it can be implemented. Here we assess how realistic each party’s promises are, considering economic feasibility, political obstacles, and each side’s past performance in delivering on housing plans.
Labor’s Likelihood of Implementation: As the incumbent government, Labor has the advantage of having already begun work on parts of its housing agenda. Many of Labor’s 2025 pledges build on existing programs, suggesting a high likelihood of follow-through. Expanding the 5% deposit guarantee scheme to all first-home buyers could be done administratively or with simple legislation. Since a version of this scheme (the First Home Guarantee) already exists and has helped over 150,000 buyers in recent years, scaling it up is feasible. There may be a fiscal cost in terms of contingent liabilities, but the government does not directly spend money except in cases of default. Politically, this is very popular and would almost certainly pass the Senate (the opposition would find it hard to justify blocking a help-to-buy measure that voters clearly favour).
The 100,000 homes construction plan will be more challenging to execute but is still feasible with political will. Financing it ($10b) is within the federal budget’s capacity, especially spread over several years, and the government can borrow at sovereign interest rates to invest in housing (potentially even recouping some funds when those homes are sold). Labor’s track record in its first term shows both perseverance and eventual success in housing initiatives: it managed to pass the Housing Australia Future Fund legislation in 2023 after initial Senate roadblocks, and it secured support for its Help to Buy shared-equity scheme by late 2024 despite a long standoff with the Greens. This indicates that a re-elected Labor government would likely be able to navigate any Senate negotiations or stakeholder pushback to implement its new promises. State governments (of all political stripes) would also have a strong incentive to cooperate on the 100k homes, since every state is facing housing pressures and would benefit from federal funds and shared credit for new housing projects.
In terms of consistency, Labor has adjusted its policy approach since prior elections (for instance, abandoning the 2019 proposal to curb negative gearing tax perks, after that proved politically unpopular). But its core theme of improving affordability for first-home buyers and increasing housing stock has been consistent from 2022 to 2025. Importantly, Labor did deliver (or is in the process of delivering) the major housing promises from the 2022 election – such as the social housing fund and the shared equity scheme – albeit delayed and not without compromise. This track record suggests Labor tends to implement what it promises on housing, even if it requires negotiating with minor parties. The new pledges (guarantee and construction program) align with that trajectory and with Labor’s governing philosophy of active government involvement in housing. Thus, the likelihood of implementation is high. The main uncertainties lie in execution details: how quickly can those 100k homes be built, will they hit the full target, and will the broad deposit scheme overheat demand? Those are issues of outcome, not whether the policies will be enacted. We can expect a re-elected Labor government to enact these policies and commit the funds, as housing is a signature issue they are staking their campaign on.
Coalition’s Likelihood of Implementation: If the Coalition wins the election, they would of course push to implement their platform, but some parts of it may face hurdles. Historically, the Coalition in government has favoured market-led housing solutions and has been wary of large-scale government spending in housing. During their last tenure (2013–2022), direct federal investment in housing was limited (Labor claims the Liberals spent under $5b on housing in a decade) and programs like the National Rental Affordability Scheme were allowed to lapse. Instead, they introduced smaller-scale measures like the first-home loan deposit scheme (10,000 guarantees per year starting 2019) and temporary boosts like the HomeBuilder grants during COVID. That indicates they can deliver on first-home buyer assistance initiatives – for example, the deposit guarantee scheme they created is essentially what Labor is now expanding. They also consistently maintained investor tax benefits (negative gearing, CGT discounts) as promised. In opposition, however, the Coalition voted against Labor’s housing fund and other measures in 2023, aligning with the Greens to stall those programs. This raises a question: will they support public spending on housing when they return to government? Their platform’s focus is indeed more on private sector incentives, which is in line with their past behaviour, so that is a consistency point.
The mortgage interest tax deduction would be a major policy shift, but if the Coalition has a majority government, they could likely pass it through the House. The real test would be the Senate: such a structural tax change might face opposition from Labor and Greens senators, who argue it’s inflationary and regressive. The Greens have openly ridiculed the idea (one economist called it “the dumbest policy” of the century). Unless the Coalition also secures a working majority in the Senate (unlikely), they’d need to negotiate with independents or minor parties. They might find support from certain crossbenchers (for example, some populist or right-leaning senators might favour helping first-home buyers and cutting immigration). It is not impossible that it could pass, especially if the Coalition claims a mandate from the election. But it isn’t as easy a sell as Labor’s policies – this is uncharted territory for Australia’s tax code.
Economic feasibility is another aspect: the policy is estimated to cost the budget about $1.25 billion over four years. That cost is not enormous in federal terms, but it adds to a range of tax concessions. The Coalition would argue they can afford it by cutting “wasteful spending” elsewherel; indeed, they signalled they’d cut Labor’s big housing funds (which they dub unnecessary spending) to make room. As a government traditionally focused on budget restraint, the Coalition implementing a new tax break while also funding a $5b infrastructure package means trade-offs – possibly scrapping Labor’s HAFF and other programs (Labor warns the Coalition is “promising to cut tens of billions from housing” programs Labor had planned). That suggests a policy reversal risk: a change of government could halt Labor’s in-progress initiatives in favour of the Coalition’s new ones, causing some disruption or delay in getting housing programs running.
Other parts of the Coalition plan are more straightforward to execute. The superannuation-for-housing scheme could likely be passed (it’s politically popular with the Liberal base, though Labor/Greens oppose it – still, it’s a simpler legislative change that might pass with certain crossbench support). Cutting migration and banning foreign buyers can largely be done through executive decisions and regulations – these are highly feasible since they don’t rely on parliamentary approval in the same way. (There may be pushback from universities and industries dependent on immigration, but a government has wide leeway on immigration policy administratively.) The $5b infrastructure fund for housing would require budget allocation, which a Coalition government could do. This might even gain bipartisan support because it benefits states across the board; if not, it can be included in appropriation bills that are conventionally passed. Re-establishing a building industry watchdog or taking on the CFMEU would require legislation to give effect (e.g., recreating the Australian Building and Construction Commission that Labor abolished). The Coalition has done this before (they created the ABCC in an earlier term), so they have the know-how, but again Senate numbers could be a sticking point if Labor and Greens strongly resist.
In terms of past consistency, the Coalition’s new housing pledges align with its long-standing narrative of supporting homeownership. They promised the super access and delivered the first-home guarantee in previous campaigns, so there is continuity there. The mortgage interest deduction is a new idea for them – a bold move given they used to attack Labor for any housing tax changes (though those were tax increases on investors). It indicates the Coalition recognises the need for noticeable action on housing this election. If they win, failing to implement that signature promise would be politically damaging, so one can expect them to push hard for it. Whether they succeed may depend on how they manage the Senate and public opinion if the policy proves contentious.
Overall, the Coalition is likely to implement most of its housing agenda if elected, but some items (especially the tax deduction scheme) face more political and practical hurdles than Labor’s simpler, spend-and-build approach. The Coalition would also have to reconcile its housing spending with its promises to cut overall spending (to reduce inflation); this could mean some of their plans get delayed or downsized if budget pressures mount. Their track record in government shows a tendency to prefer smaller, targeted programs over big state-driven projects, so it will be interesting to see if they fully embrace the scale of intervention they now propose.
Social Equity and Impact on Vulnerable Groups
Housing policy can have very different effects across social groups. Key questions include: Who benefits most from these proposals? Do they help low-income and vulnerable people or primarily the middle class? And how do they address renters or the homeless?
Labor: While Labor’s 2025 promises are largely focused on first-home buyers (who by definition have moderate incomes and savings, at least enough to contemplate buying), there is a social equity dimension in how they’ve structured these policies. First, the 100,000 affordable homes are meant to be within reach of people who otherwise struggle to buy – likely younger families, key workers, and moderate-income earners who have been priced out. By reserving these homes for first-time buyers, Labor aims to give those who don’t already own property a leg up, rather than investors or wealthier buyers. Clare O’Neil emphasised that these homes would be in the “affordable end of the market” and not open to competing bids from investors. There is an implicit equity goal of generation fairness here, addressing the imbalance where younger Australians with no family property wealth have been locked out of ownership. Additionally, Labor hinted that access to the 100k homes will “in all likelihood” be income-tested, which would ensure that lower and middle-income first-home buyers, not high-income earners, get priority to purchase these discounted houses. If implemented, that would enhance the social equity impact of the policy by targeting those who need assistance the most.
Labor’s housing agenda beyond homeownership also speaks to equity: the HAFF is directed at building social housing for very low-income groups (including specific allocations for women fleeing domestic violence and older women at risk of homelessness), and affordable rentals for workers like nurses and cleaners. Furthermore, Labor increased rent assistance for welfare recipients and has been working with states on strengthening tenants’ rights. However, it must be noted that these broader measures were not significantly expanded in the new election promises, largely because they were already announced or underway. The Greens have criticised Labor for not doing more for renters in the short term (no rent caps or freezes, for example). So, in the context of this election’s proposals, Labor’s direct benefits skew toward those who are at least in a position to contemplate buying a home (which typically excludes the lowest-income Australians). A homeless person or a very low-income renter will not be immediately helped by a 5% deposit guarantee, since their issue is lack of income or savings altogether. The equity merit in Labor’s plan is more about helping the “working poor” or middle segment (teachers, nurses, young professionals, etc.) attain housing, and about modestly increasing the supply of affordable dwellings which, in the long run, can ease pressure on everyone.
In summary, Labor scores reasonably on social equity due to its concurrent investment in social housing and the likely targeting of its new homes to those of modest means. But its flagship policies do relatively little for the current crisis facing renters who cannot buy. Labor’s decision to make the 5% deposit scheme universal (no income cap) means even relatively well-off first-home buyers (earning above the old scheme’s limits of ~$125k for singles) can benefit, which dilutes the targeting. It’s a trade-off between simplicity/universality and directing help to only those most in need.
Coalition: The Coalition’s housing policies are less focused on low-income support and more on the broad aspiration of home ownership. By design, their first-home buyer incentives favour those who have the income to service a mortgage. The tax deduction scheme, for instance, is worth the most to those with higher incomes (because they pay higher marginal tax rates, so deducting interest saves them more). In fact, Grattan Institute analysis pointed out it “would disproportionately benefit those on higher incomes” within the eligible group. To the Coalition’s credit, they did set an income ceiling (singles < $175k), which excludes the very richest from the subsidy. But $170k/year earners are hardly the most vulnerable Australians; many low-income workers won’t be buying a home at all, tax break or not. The superannuation access policy similarly benefits those who have steady employment and have accumulated savings in super, again, skewing toward the middle class. Someone with very low lifetime earnings wouldn’t have $50k in super to withdraw in the first place.
On the other hand, the Coalition might argue that by increasing overall supply and reducing competition, their plan helps everyone in a general sense – for example, reducing immigration could ease rental demand, which might slow rent increases and help low-income renters somewhat. Also, by freezing costly regulations and trying to lower construction costs, they aim to make housing cheaper to produce, which could ultimately lead to cheaper prices across the board. However, these effects are indirect and long-term. In the near term, there is no direct relief for renters or the homeless in the Coalition’s platform. They notably oppose reforms that would curtail investor benefits (such as negative gearing), which suggests continuing the status quo where investors often outcompete first-home buyers for properties. The Coalition is effectively choosing to boost the first-home buyer side without asking anything of the investor side, whereas Labor’s earlier stance (now abandoned) was to slightly handicap investors via tax changes to level the field. Social housing construction is also absent from the Coalition’s promises – indeed, they are likely to cancel Labor’s social housing fund (viewing it as ineffective or fiscally imprudent). So, groups reliant on social housing or unable to afford any home purchase would see little immediate benefit if the Coalition’s plan were enacted.
Additionally, some critics say the Coalition’s focus on migration cuts as a solution can scapegoat immigrants while the real issue is a lack of housing investment, and reduced migration could have other social downsides (like fewer skilled workers to build homes or care for an aging population). But in terms of housing equity for citizens, limiting foreign buyers and migration does prioritise Australian residents’ access to housing, which could be viewed as levelling the playing field for local first-home seekers.
Bottom line – Equity: Labor’s approach tends to be more inclusive of lower-income needs in the wider housing strategy (with social housing, rent assistance, etc.), though its first-home buyer measures mainly help the moderate-income earners rather than the poorest. The Coalition’s approach primarily benefits those poised to buy homes and leaves out direct support for those who can’t. In fact, the Coalition is adding a tax break that will send considerable benefit to middle/high-income first-home buyers (and indirectly to builders and developers), while not investing in affordable rentals or shelters. This has led experts like Dr. Sathanapally to critique the Coalition plan for “sending more tax breaks to high-income earners… when we should be trying to rein these tax breaks in”. If one measures social equity by how the most vulnerable are served, Labor’s plan (especially counting its separate social housing efforts) is stronger. If one measures it by opportunities for younger families with limited wealth, both plans offer something, though Labor’s cost-controlled homes and guarantee may reach a bit further down the income spectrum than the Coalition’s tax deduction, which really requires a solid income to make use of.
In summary, Labor’s housing platform leans more toward social equity by incorporating affordable housing supply and renter support (past and present), whereas the Coalition’s platform is less oriented to low-income support, focusing instead on aspiring homeowners and overall market efficiency.
Policy Measures: Labor vs. Coalition
First-Home Buyer Assistance
Labor
Labor is expanding its 5% Deposit Guarantee so that any first-home buyer can access it—no income caps, no quota limits. This means you can buy a home with just a 5% deposit and avoid paying Lenders Mortgage Insurance (LMI), potentially saving over $20,000. It’s available for properties up to $1 million in major cities like Sydney and Melbourne.
Coalition
The Coalition offers a bold new tax incentive: first-home buyers of newly built homes can deduct their mortgage interest from income tax for the first five years. This could be worth up to $11,000 a year. It’s available to singles earning up to $175,000 or couples earning up to $250,000. They’re also reintroducing their policy to let first-home buyers withdraw up to $50,000 from their super for a deposit (which must be repaid when the home is sold).
Housing Supply Boosts
Labor
Labor plans to directly invest $10 billion to build 100,000 new homes over 8 years, sold at-cost and reserved exclusively for first-home buyers. These homes would be delivered in partnership with state governments and non-profit providers, helping to reduce competition between first-home buyers and investors. They’re also continuing their $10 billion Housing Australia Future Fund for 30,000 social and affordable rentals.
Coalition
The Coalition wants to unlock land for private development. They’ll put $5 billion into infrastructure, like roads and sewerage, to open up land for up to 500,000 new homes. They’ll also freeze any new building code changes for 10 years to keep construction costs down, train 400,000 new tradespeople, and deregulate union activity in the construction industry.
Managing Demand Pressures
Labor
Labor isn’t directly restricting housing demand this election. Their focus is on increasing supply and making it easier for first-home buyers to compete. They’re not touching negative gearing or capital gains tax discounts for investors.
Coalition
The Coalition is targeting demand. They’ll reduce immigration temporarily—from 185,000 down to 140,000 annually—and ban foreign buyers and temporary residents from purchasing existing homes for two years. They say this could “free up” 40,000 homes in the first year. Investor tax perks like negative gearing will remain untouched.
Summary of Key Differences
- Labor wants to build homes directly and help buyers save on deposits.
- The Coalition wants to stimulate the private sector by removing roadblocks and offering tax breaks.
- Labor’s approach is more government-led with a tilt toward equity and affordability.
- The Coalition’s approach is more market-driven, aiming to boost supply and buyer capacity while managing population growth to ease demand.
Conclusion
Australia’s housing crisis has prompted both major parties to propose some of their most interventionist housing policies in years. Labor’s approach centres on government action to lower the barriers to ownership and directly create affordable homes, building on its first-term policies. The Coalition’s approach focuses on empowering buyers and the market – through tax relief, use of superannuation, accelerated land release, and curbs on what it views as excessive demand – to correct the housing imbalance.
In evaluating these plans, it’s clear there are trade-offs. Labor’s plan delivers tangible affordable housing and spreads benefits more progressively, but may not satisfy those who argue for bolder supply measures or immediate price drops. The Coalition’s plan takes bigger swings at boosting housing production and easing macro-demand, yet it has drawn criticism for potentially inflating prices in the short term and for favoring those already relatively well-off. Notably, both parties avoid tackling investor tax concessions or rental price controls, meaning neither directly addresses some causes of high housing costs – a sign of political caution lingering from past debates.
When it comes to credibility, voters will look at what each party has (or hasn’t) done in the past. Labor can point to its achievements like the HAFF and increased rental assistance (after initially struggling to get them through) as evidence that it will persist on housing reforms. The Coalition will emphasize its commitment to the “Australian dream” of ownership, though skeptics will remember that during its last tenure housing affordability worsened significantly. Each party also accuses the other of failures: Labor notes the Coalition “did nothing while the housing crisis got worse” over the previous decade, whereas the Coalition blames Labor’s recent governance for interest rate hikes and falling construction rates.
Ultimately, the impact of these policies will depend on execution and external factors like interest rates, construction industry capacity, and state cooperation. It’s possible that, whoever wins, elements of both approaches (government investment and private-sector stimulation) may be needed to truly solve the housing crunch. As it stands, voters have a clear choice between two visions: one where government takes a more hands-on role in building and enabling ownership, and one where government sets the conditions for the market to deliver and backs off areas it sees as impediments. Both represent a step beyond the status quo, reflecting housing’s newfound status as a top-tier national issue.
In May 2025, Australians will render their verdict on which plan – Labor’s targeted boost to supply and buyer support, or the Coalition’s broad incentive-driven package – offers the better path to housing affordability. Regardless of the outcome, the intense focus on housing this election is a hopeful sign that meaningful action will be taken. The true test will be turning these promises into roofs over people’s heads, and ensuring that in the years ahead, the great Australian dream of an affordable, secure home can once again feel within reach for all.
