Labor's expansion of the home guarantee scheme, removing the 50,000-place cap from October and broadening eligibility, is drawing warnings from experts who say it will drive house prices higher. The scheme allows first-time buyers to purchase with a 5% deposit, backed by a taxpayer guarantee.
Independent property expert Cameron Kusher described the move as 'only going to drive prices higher and increase competition for the housing stock'. He questioned Treasury's estimate that the policy would add only 0.5% to prices over six years, noting previous demand-side stimulus had led to substantial rises.
Brendan Coates of the Grattan Institute called the expansion a 'backwards step', arguing it helps buyers who would have purchased anyway and risks worsening affordability. He stressed the need for supply-side solutions, pointing to the government's likely shortfall of 262,000 homes against its 1.2 million target.
Peter Tulip of the Centre for Independent Studies warned of a 'one-way bet' for borrowers and increased risk of housing bubbles. He reiterated that boosting supply remains the priority, but current policies are 'a rounding error' relative to the target. Prime Minister Anthony Albanese defended the target, stating 'if you don't have a target, you're not trying'.
