First-time homebuyers will be able to purchase properties with as little as 5% deposit.
Following the 2025 Australian federal election, Prime Minister Anthony Albanese’s Labor government secured a second term with a significant majority, positioning itself to implement substantial housing reforms aimed at assisting first home buyers and addressing broader
housing affordability challenges.
A main component of Labor’s housing strategy is the expansion of the First Home Guarantee scheme. This initiative allows first-time homebuyers to purchase properties with as little as a 5% deposit without the need for Lenders Mortgage Insurance (LMI), potentially saving buyers up to $20,000. Previously limited by income thresholds and availability caps, the scheme’s expansion aims to make homeownership more accessible to a broader segment of the population.
In addition to facilitating home purchases, the government has committed $10 billion to construct 100,000 new homes over the next eight years, exclusively for first home buyers. This investment is part of the broader $43 billion Homes for Australia Plan, which seeks to increase housing supply and alleviate pressure on the housing market.
While these measures are designed to support first home buyers and stimulate housing construction, some experts caution that increasing demand without corresponding supply-side reforms may inadvertently drive up property prices. Therefore, the success of these initiatives will depend on effective implementation and coordination with state governments and the construction industry to ensure that increased demand is met with adequate housing supply.
Overall, the election outcome provides the Labor government with a strong mandate to pursue its housing agenda, offering potential relief to first home buyers and aiming to address long-standing issues of housing affordability in Australia.
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