Labor has announced a new $10 billion fund which it says will build 100,000 homes exclusively for first home buyers if re-elected.
The move means the government would effectively take on the role of a developer to increase supply and ease affordability pressures facing the housing market.
As part of the plan, Labor has also promised to guarantee mortgages for first home buyers who can put down a five per cent deposit.
This would allow many young voters to enter the housing market with a deposit of as little as $40,000, compared to about $200,000 otherwise.
Deputy Prime Minister Richard Marles denied this could further push up house prices.
“Government needs to be in the business, right now, of getting more homes built. Fundamentally, that is the issue,” he told Sky News Sunday Agenda.
Mr Marles outlined that the 100,000 homes would not be fully delivered for about eight years.
“Obviously, these things don’t happen overnight. We will begin the process of this from the first day of a re-elected Albanese government,” he said.
“When a young person saves a five per cent deposit, my government will guarantee the rest with their bank,” Prime Minister Anthony Albanese said of the policy.
“This will help people buy their first home faster, without paying the burden of Lenders Mortgage Insurance.”
Under the scheme, eligible buyers would no longer be required to pay lenders mortgage insurance — a cost usually incurred when deposits are under 20 per cent.
Labor argues this will remove one of the biggest barriers to home ownership for young Australians and those on moderate incomes.
Meanwhile, the Liberal Party has promised one-off $1,200 tax cuts for people earning up to $144,000 a year — also tied to a $10 billion price tag.
The Coalition has trailed Mr Albanese and the Labor Party in the latest polling, at 48-52 on a two-party preferred basis.
Voting opens on Tuesday ahead of the May 3 election.
