First home buyers in the Illawarra will save up to $32,000 on mortgage insurance, Labor says, under its plan to address the growing housing crisis in regional areas.
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The proposed scheme would operate similarly to the existing first home loan deposit scheme: first home buyers would only need a deposit of 5 per cent of the property price, with the government to guarantee up to 15 per cent.
This means they would not need to pay lenders mortgage insurance.
Federal opposition leader Anthony Albanese visited Warilla on Friday with Whitlam MP Stephen Jones, Labor's candidate for Cunningham Alison Byrnes, member for Gilmore Fiona Phillips and opposition housing spokesman Jason Clare to announce the scheme.
In the Illawarra, the price of the first home would be capped at $800,000; elsewhere in regional NSW, aside from Newcastle and the Central Coast, the maximum property price would be $600,000.
"As prices go up, the caps that you set for a scheme like this need to go up as well... If we are fortunate enough to win the support of the Australian people and form a government after the next election, first thing I'll do is ask the department to review the price caps on this scheme," Mr Clare said.
Unlike the existing program (which would continue to operate), eligible first home buyers would have to have lived in the region for at least 12 months and could not earn more than $125,000 per year as an individual or $200,000 combined as a couple.
Eligible participants would also have to live in the home, rather than purchase it as an investment property.
Mr Clare said the existing first home buyers scheme supported about 7000 people in cities and 3000 people in regional areas.
Labor says its program will help an extra 10,000 individuals or families in regional areas enter the housing market, if they are elected to government.
Regional property prices have risen faster than those in capital cities over the past year.
Data from PowerHousing Australia, provided by Housing Trust, shows the median house price in the Gilmore electorate - which includes Kiama and Nowra - jumped by 39.52 per cent in the year to December 2021.
The median house price in Whitlam grew by 32.7 per cent, while in Cunningham it rose by 27.06 per cent.
Last year, the Wollongong's median property price surpassed $1 million.
Mr Albanese said the increases in property prices had outstripped the pace at which people could save for a home.
"What this is aimed at is enabling young people, but others as well, who've been saving for years to try to get into home ownership, to access that home ownership," Mr Albanese said.
Mr Clare said the program would not push house prices higher, but would help to "even the playing field" for regional Australians.
"It means they don't have to pay $20,000 or $30,000 extra when they buy a home," he said.
Mr Jones said the scheme was also critical for the local economy, as businesses were struggling to get staff because prospective employees could not afford to live in the region.
In the Gilmore electorate, Ms Phillips said she was seeing an increasing number of people who could not find a place to live.
Mr Albanese said Labor also planned to increase housing stock through its Housing Australia Future Fund.
Under this fund, Labor pledges to build 20,000 social housing properties and 10,000 affordable housing properties over five years.
"By having greater supply, you have an impact on the housing market," Mr Albanese said when asked about Labor's plans to address the skyrocketing home prices.
"Quite clearly, we need to work as well cooperatively with state governments."
Mr Clare added that the federal government needed to work with state governments on releasing more land so more housing stock could be built.
Mr Jones said rents were getting pushed up in the Illawarra, as areas that were traditionally low-income and rental housing were being bought up by people with higher incomes.
"So that sends a very clear message that we've got to increase the stock of social housing as well," Mr Jones said.
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Natalie Croxon
Reporter at the Illawarra Mercury, mostly covering social affairs. Previously of the Bendigo Advertiser, Northern Daily Leader and Quirindi Advocate. Our Watch award winner.
Reporter at the Illawarra Mercury, mostly covering social affairs. Previously of the Bendigo Advertiser, Northern Daily Leader and Quirindi Advocate. Our Watch award winner.
