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Full Story Why Labor and the Coalition's housing policies could make the crisis worse
Apr 16, 2025
Saul Eslake, an independent economist known for his insights on housing issues, shares his expertise on recent housing policy announcements by Labor and the Coalition. He argues that these measures aimed at helping first-time home buyers might inadvertently drive house prices higher. Eslake critiques the historical failures of past housing policies and discusses the political motivations behind current proposals. He also emphasizes the urgent need for effective rental policies and increasing housing supply to truly address the crisis.
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Demand-Boosting Policies Inflate Prices
- Both major parties' housing policies primarily boost demand without sufficiently addressing supply.
- This approach inflates house prices and worsens affordability for first-home buyers.
Coalition Policies Increase Demand
- Coalition policies will increase buyers' borrowing power through tax deductions and super withdrawals.
- These measures increase demand but do not solve the housing supply shortage.
Labor's Deposit Policy Raises Prices
- Labor's 5% deposit policy lowers barriers but still places upward pressure on prices.
- Labor acknowledges price increases, unlike the coalition which denies substantial price effects.