Why Property Investors Should Pay Attention to Labor’s Housing Plan
The sweeping Labor election victory means significant changes are coming to Australia’s housing market, with affordability as a central focus.
The Albanese Government’s housing policies are especially relevant for property investors looking to understand how upcoming reforms will impact house prices, investment strategies, and associated risks.
What Are the Core Elements of Labor’s Housing Agenda?
Labor’s policy is centred on:
- Increasing housing supply to address affordability
- Supporting renters, first homebuyers, and those in housing crisis
Reducing foreign property investment
$10 Billion Investment for 100,000 New Homes
One of the policy’s cornerstones is a $10 billion pledge to build 100,000 homes for first homebuyers over eight years—an ambitious target considering current construction delays.
Removal of Income Caps for First Home Buyer Support
From 2026, income limits for the First Home Buyers Guarantee will be abolished. This will allow any first homebuyer to purchase with just a 5% deposit, without paying Lenders Mortgage Insurance (LMI).
This initiative is expected to expand the scheme’s reach from 50,000 to 80,000 new homeowners annually.
How Will This Affect Property Prices?
According to Ray White Chief Economist Nerida Conisbee, while the policy is positive for accessibility, it may also fuel price increases due to sudden boosts in demand.
“By removing the need for LMI and a 20% deposit, the policy lowers the entry barrier dramatically… the difference could be between needing a $200,000 deposit and just $50,000.”
However, she stresses that housing supply must keep up with this added demand to avoid price surges that negate affordability benefits.
What Do the Supply-Side Measures Look Like?
Labor’s plan includes several key initiatives to help address the construction side of the housing equation:
- 55,000 social and affordable homes via the Housing Australia Future Fund
- $78 million investment to fast-track trade qualifications
- $10,000 cash incentives for eligible apprentices in housing construction
What About the Help to Buy Shared Equity Scheme?
This scheme allows the government to contribute up to 40% of a home’s cost, with first homebuyers repaying that portion later. It lowers entry costs and mortgage repayments for buyers—likely increasing demand and competition in the market.
Will Foreign Investment Be Restricted?
Yes. A ban on foreign investors purchasing established dwellings is intended to free up housing stock for Australians and reduce speculative competition.
What Does This All Mean for Property Investors?
While the new housing mandate is clearly designed to help first-time buyers, property investors may see:
- Short-term demand increases, leading to higher prices
- Policy-driven construction activity, which could stabilise prices long term
- Greater competition in entry-level property segments
Ultimately, how these policies impact investors will depend on how effectively the government addresses labour shortages, controls costs, and speeds up construction.
