‘Dumb and dangerous': The Barefoot Investor slams Anthony Albanese, Peter Dutton

News.com.au

30-04-2025

Leading financial expert Scott Pape has slammed the major housing policies of both Anthony Albanese and Peter Dutton as 'dumb and dangerous'.
The best-selling author, known as The Barefoot Investor, declared the proposed solutions to Australia's crippling housing crisis won't help many, if any – and will likely make things much, much worse.
'Labor wants to slash deposits to five per cent, which is as dumb as it is dangerous,' Pape wrote in his regular column in the Herald Sun.
'Remember, the US subprime crisis was created by politicians making it easier for broke people to buy homes.'
The Coalition isn't doing any better on the housing policy front though.
'Not to be outdone, Dutton, the so-called economic conservative, is promising to allow first home buyers to raid their super and write off their mortgage interest.'
Both policies will put significant upward pressure on home prices by driving demand without stimulating short-term supply.
'[They are] like turning up at an auction and handing everyone a suitcase full of cash. It doesn't make homes cheaper. It just lets buyers bid higher – and history shows they always do.
'And the result? It drives house prices higher. It drives rents higher. It's madness.'
Housing innovation expert Ehsan Noroozinejad, a senior researcher at Western Sydney University, agreed with the assessment.
'[Labor]'s five per cent deposit and shared equity scheme ease upfront costs, yet they also lift demand, which can nudge prices higher unless supply keeps pace,' Dr Noroozinejad said.
The Coalition's proposal to make first home buyers' mortgage interest repayments tax deductible will also 'supercharge demand immediately', he said.
'They all put more bidding power in buyers' pockets, a recipe for price escalation if building lags.'
The prime minister has committed $10 billion towards building 100,000 new homes specifically for first-time buyers.
While it's a welcome pledge, it could wind up being a drop in the ocean.
'It covers barely a quarter of the 400,000 dwelling shortfall forecast against the national 1.2 million new homes [in five years] target.'
And as Housing Industry Association managing director Jocelyn Martin said, the volume of new dwelling completions is currently at its lowest level in more than a decade.
'And it has remained at that level for three years,' Ms Martin said.
'All three tiers of government have added additional, unnecessary costs, to delivering a new apartment and detached home over the past five years. [They] need to work together to bring down the cost of delivering a new home to market.'
It has never been harder for young Australians to buy their own home, CoreLogic research director Tim Lawless said, thanks to an imbalance between housing supply and demand combined with a cost-of-living crisis, high interest rates and low savings.
Those with a typical household income now need to spend eight times their salary to buy the median-priced dwelling, Mr Lawless said.
'Similarly, a median-income household purchasing the median value dwelling with a 20 per cent deposit would be dedicating just over half their gross annual income to mortgage repayments.'
To put that last measure in perspective, the consensus among economists is that spending more than 30 per cent of one's income on housing costs is a sign of financial distress.
'The cost of owning or renting a home has been pushed higher, placing immense pressure on many Australians, particularly first-time homebuyers and renters,' Mr Lawless said.
On top of that, research by the Australian Housing and Urban Research Institute found just 11 per cent of first-time buyers can get into their own homes without facing major financial constraints.
It found 84 per cent of young Aussies face setbacks in scraping together a deposit, while 71 per cent face repayment constraints.
Despite the problem worsening over recent years, Mr Pape said both the major parties had failed to offer practical or meaningful solutions.
Instead, he said it seemed 'both have designed their policies to fit on a highway billboard – big font, feel-good slogan, eye-roll logic, paid for with borrowed money'.
'And in doing so they've turned the great Australian dream into a financial trap,' he said.
Housing advocacy group Everybody's Home said Labor's promises have fallen 'well short of what's needed' to seriously address the housing crisis.
'In fact, some elements could make it even worse,' spokesperson Maiy Azize said.
'To make housing more affordable, we need to get rid of tax breaks when it comes to property, not create more.'