Another election gone and, despite what some might have led you to believe, the world’s still turning.
Labor and Anthony Albanese staying in power for another term gives them the chance to build on some of their promises. But what are we expecting to see from Labor’s 2025 housing policies? And how will they impact the average Australian mortgage?
1.2 million new homes for Australia
Labor is aiming high with its housing policy, pledging to see 1.2 million new homes built by 2029. That’s roughly 20,000 homes every month or 240,000 every year. That includes $10 billion for 30,000 social and affordable homes.
On paper, that sounds great. In practice? Highly doubtful.
To put it into perspective, the only time Australia has come close to that was in 2017, when just over 253,000 homes were built. Hitting that target consistently over five years would be unprecedented. Even if it were achievable, the government isn’t building the homes themselves — they’re just funding the infrastructure to enable developers. If the economics don’t stack up for developers, projects simply won’t happen. That’s the missing link here: feasibility and incentive.
Upgraded infrastructure
On top of that investment, Labor’s pledging $1.5 billion for building infrastructure like roads, sewage and utilities. It sounds significant until you look at the numbers. In one example, their investment would enable just 40 homes in a new suburb. That’s a drop in the ocean compared to the 20,000 per month needed to hit their target.
Help to Buy scheme
Labor’s Help to Buy scheme is another headline grabber. First floated in 2022, we’re now in 2025 and it still hasn’t launched. It’s supposed to start this year — but that’s what they said last year… and the year before.
The scheme offers co-ownership with the government, allowing eligible buyers to purchase a home while owning as little as 70% of it. While some argue “better to own 70% than nothing”, there are serious catches. The biggest is that once your income goes past their threshold (currently $100k p/a if you’re single or a combined $160k p/a for a couple), you’re required to refinance and repay the government’s share. That’s a potential shock to your mortgage and a big risk if you’re already stretched. If you’ve taken on extra responsibilities in that time like personal loans, you may find yourself in a position where you can’t borrow the extra money required. And then what?
Worse still, the program is limited to just 10,000 spots per year. When the First Home Loan Deposit Scheme launched, its 10,000 spots were snapped up in the first month. The demand far exceeds supply, and that’s a red flag for anyone planning their entry into the housing market.
First Home Guarantee
The standout policy remains the First Home Guarantee. Labor’s continuation of a successful Liberal initiative. This allows buyers to enter the market with just a 5% deposit and no lender’s mortgage insurance, as the government guarantees the remaining 15%.
This is a smart, low-risk policy for the government. Given rising property values, the chances of them actually having to pay out are minimal.
Plus, it now comes with:
– No income caps (previously $125K for singles, $200K for couples)
– Increased property caps (up to $1.5 million in Sydney)
– Unlimited spots
That’s a game-changer. It opens the market to a wider group of buyers and removes the limitations that previously excluded many would-be homeowners.
Increased building speed
Labor has promised $54 million for modular housing and $120 million to reduce red tape on new construction developments.
Prefab and modular homes can be built a lot more quickly than traditional projects. If this takes off, it could make a huge impact on costs and wait times, and help with achieving their ambition targets for new houses in their next term.
Free TAFE for construction trades
To help improve the speed and quality of new builds, Labor is investing heavily in education.
They’re spending $78 million to fund 6000 courses for tradies, meaning there’s no cost for people to become qualified. This includes a new program to give a new path for experienced tradies who want to add a qualification to their resume.
Ban on foreign purchasing
Once the new term begins, Labor will ban foreign purchases on existing homes for two years. This will reduce the demand on the market, giving Australian citizens more buying power.
Overseas investors can still buy new and off-the-plan properties, and will be allowed back onto the market in two years.
Final thoughts
Labor hasn’t exactly excelled in its first term, but there are certainly positives with their new manifesto. The 5% deposit scheme is a winner. Free TAFE helps with workforce shortages. Some of the infrastructure investment is meaningful. But the 1.2 million homes goal? Without serious incentives for developers and systemic reform, it feels more like a political talking point than a practical plan.
At the end of the day, it’s not enough to set targets. We need policies that make them achievable.
If all comes to fruition, we should see it become slightly easier for Aussies — especially first time buyers — to get on the property ladder, but there’s always more that can be done.
In video form:
@bradeast_mortgagebroker With the federal election on Saturday, we take a look at the housing policies of the two major parties. First up: Anthony Albanese and Labor’s pledges. #AusPol #FederalElection #Election2025 #Labor #AnthonyAlbanese #HousingPolicies #RealEstate
