Why first-time homeowners need to 'get in before the crowd' and buy now
Hopeful home buyers have been urged to pull the trigger now before a first home assistance scheme causes property prices to surge.
From January 2026, the federal government will guarantee half the deposit on Australians' first homes, slashing the requisite from 10 per cent to five per cent.
A deposit of just $50,000 would be enough to purchase a $1million home.
However, industry experts warned the plan will fuel housing stress by opening the door to a flood of demand in a low-supply market.
Michael Yardney from Metropole Property Strategists has predicted vendors will react to the scheme by raising house prices - making homes less affordable for future generations of entry-level buyers.
'Property prices will skyrocket in early 2026 when Labor's five per cent deposit scheme comes into effect – get in before the crowd,' he told the West Australian.
'Sure, prices seem expensive but that's what your parents said. Who wouldn't like to buy their parents' home for the price they paid.'
Tim Reardon, an economist from the Housing Industry Association, also encouraged first-time buyers to buy now before the scheme takes effect.
'The housing affordability problem will get significantly worse over the next three years as we complete a low volume of homes, and population growth remains extraordinarily high,' he said.
Labor's Homes for Australia Plan also promises to shore up renters' rights.
The Albanese government has vowed to build 100,000 homes exclusively for first-time buyers to balance demand for property introduced by its deposit scheme.
They also believe their $43billion commitment to the housing industry - eight times more than the Coalition invested in a decade - will see the construction of 1.2million homes over the next five years.
But critics have repeatedly slammed Labor for slow progress on its plans.
According to data released by the Australian Bureau of Statistics in April, over one million homes need to be built by 2029 to keep up with projected demand.
Australia needs to build 57,000 homes per quarter between 2024 and 2029. The current rate sits about 20,000 houses below that requirement.
It follows a strong period of construction during the pandemic.
Experts say growth in the industry has been hampered by labour and materials shortages, which the government has promised they are addressing.
Slow planning processes and approvals, and high interest rates have also hindered construction. The number of commenced and finished construction projects were down in 2024 compared to previous quarters.
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