Amrita Nayak, 35, is one of Australia's three million renters. But she wants to buy a house and is in the market for a place to start a family, with a backyard for a dog.
She said the dream feels like it is getting harder to grasp.
In her hometown of Canberra, the average house price has pushed past $1 million, according to figures from property analysts CoreLogic.
Amrita Nayak and partner Bibhuti Panda inspect a house in the Canberra suburb of Holt. Credit: Lucy Murray
“You have got your rental payment, your household expenses and on top of that you are trying to save, it is a very difficult job.”
Real Estate Agent Fiona Murray has five houses on the market in Canberra and speaks to first home buyers regularly.
She said the most are concerned about servicing large mortgage repayments.
"It's more about how they're going to maintain that mortgage... people are thinking about it quite a bit," she said.
Real Estate Agent Fiona Murray at a home open in the Canberra suburb of Holt. Credit: Lucy Murray
The Coalition’s existing New Home Guarantee Scheme
The Coalition's New Home Guarantee scheme was introduced in 2020 and has 50,000 places annually for people earning up to $125,000 for a single person or $200,000 for a couple.
It's for people who are looking to build or buy a new home and live in it. First home buyers need a deposit of five per cent, or two per cent for single parents.
The government underwrites the loan, saving the buyer paying Lenders Mortgage Insurance (LMI), which lenders require if the deposit is less than 20 per cent of the total value of the property. On a $700,000 house, LMI is about $30,000.
There are limits on the value of the home you can buy, depending on where you live. The price caps will increase on 1 July this year.
For example, in NSW the value of the property in Sydney and regional centres can't exceed $800,000 ($900,000 from 1 July) and it can't be more than $600,000 ($750,000 from 1 July) for places in the rest of the state.
In Victoria, the ceiling on the property value is $700,00 ($800,000 from 1 July) for Melbourne and regional centres and $500,000 ($650,000 from 1 July) for the rest of the state.
The Coalition's policy is low cost, with expenses limited to administration fees.
Labor’s new “Help to Buy” shared equity scheme
Labor plans to keep the Coalition's policy and introduce a second program involving the government having shared equity in the property. The proposed scheme has 10,000 places available annually, making a total of 60,000 places.
It's for people earning up to $90,000 for a single person and up to $120,000 for a couple. The deposit needed is two per cent.
The scheme is for people planning to buy a new or existing home and live in it.
The buyer does not pay Lenders Mortgage Insurance as under the shared equity arrangement the government would have up to between a 30 per cent (existing homes) and 40 per cent (new homes) stake in the property.
The buyer would also have lower mortgage and interest repayments, as they’re taking on a smaller bank loan.
The policy also has caps on the value of the property you can buy, depending on where you live.
In Sydney and regional centres, for example, the total value of your property can't be greater than $950,000. For the rest of NSW, the price cap is $600,000.
In Melbourne and regional centres the price cap is $850,000 and for the rest of Victoria the cap is $550,000.
Labor's policy would cost the tax payer $329 million over four years.
But, the party argues it will make some of that back, as it will take a share of the profits when a house is sold.
‘Not going to make a significant difference'
Economist and Associate Professor at Australian National University Ben Phillips, said both policies could help a small number of people.
“You have got about three million renter households… [so] we’re really just scratching the surface of the housing affordability problem in Australia,” he said.
“These particular solutions are nice to have, but they’re not going to make a significant difference.”
The flip side, is the numbers for both schemes are so low, the former economist with the Housing Industry Association said neither is likely to push up house prices.
“They're might be some upwards pressure, but it's likely to be quite minimal. It is a very small scheme, so I can't see it having too much impact on house prices,” Professor Phillips told SBS News.
The fact that in many cases the schemes' price caps were below the median housing price was also an issue.
For example the cap for buying a house in Sydney is $950,000 under Labor's scheme and from 1 July $900,000 under the Coalition's scheme, but CoreLogic has the Sydney median house price at $1.16m.
In Hobart, the cap is $550,000 under Labor's scheme and from 1 July will be $600,000 under the Coalition scheme, but the median house price in the Tasmanian capital is $724,000, according to CoreLogic.
“It really limits the sorts of houses first home buyers can buy through this scheme, most buyers would be buying units, so small one or two bedrooms in capital cities, or new small houses on the fringes of capital cities,” Mr Phillips said.
Professor Phillips said moves to reduce house prices are politically unfavourable, as this would put strain on the two-thirds of Australians who already own their own home.
“We saw that at the last election, where there was talk of lowering some of the [investor] concessions, such as negative gearing and the capital gains discount,” he told SBS News.
“In the absence of making housing less attractive through those concessions for investors it is unlikely we are about to see any large scale reductions.”
“With interest rates on the way up that might be one way to lowering house prices, that’s good for some people who have a reasonable deposit, but for those who are low income it is quite a challenge in terms of higher repayments.”
Greens' plan for $300,000 homes
The third largest party in Australia, The Greens, have a policy to build 125,000 public housing properties available to buy for $300,000.
It is part of the party's plan to build one million low cost homes over the next 20 years, funded by a new billionaires tax.
For Amrita Nyack though, her dream will be front of mind when she casts her ballot.
“Housing policy would be one of the priorities, top three I would say."
