Anthony Albanese and Peter Dutton have dismissed criticism from economists that their duelling housing policies will drive up prices, potentially worsening rather than easing the nation’s affordability crisis.
The prime minister and opposition leader toured housing construction sites on Monday, to sell their competing election commitments to make it easier for young Australians to break into the property market.
Labor has promised to invest $10bn to build 100,000 homes reserved for first home buyers and to allow all first home buyers to buy a home with a 5% deposit without paying mortgage insurance.
The Coalition, in turn, wants to allow first home buyers of newly built homes to deduct mortgage repayments from their income tax.
There would be no limit to the size of the mortgage – or the purchase price of the home – but the scheme would be limited to the first $650,000 of a mortgage, only run for the first five years, and be restricted to individuals earning less than $175,000, or $250,000 for a couple.
The policies, announced at the parties’ respective campaign launches on Sunday, were roundly criticised by leading economists, who warned while some prospective homeowners might benefit, the overall impact of stimulating demand would be higher house prices across the board.
Asked directly on Monday if he wanted house prices to drop, Albanese said: “Look, historically in Australia … prices tend to rise”.
“What we want to do is to make sure that people have accessibility for home ownership.”
Responding to the same question at his press conference, Dutton said he wanted house prices to “steadily increase”.
Writing in Guardian Australia on Monday, independent economist Saul Eslake said Sunday had marked a “bad day for aspiring homebuyers”.
Eslake was slightly more critical of the Coalition’s offering, arguing that its overall housing agenda – which includes allowing first home buyers to access superannuation to buy a home – would “reignite housing price inflation”.
The independent economist Chris Richardson also panned the policies, using social media to decry the “dumpster fire of dumb stuff” being offered by the major parties ahead of the 3 May election.
Albanese and the housing minister, Clare O’Neil, brushed off the criticisms on Monday, insisting Labor was addressing supply issues with its promised 100,000 properties for first home buyers and the Housing Australia Future Fund.
“I’m happy to bring Chris Richardson here, [to] have a look at the construction, have a look at the jobs that are being created here, have a look at the economic activity that’s right here,” Albanese told a press conference at a housing development under construction in Adelaide’s inner north.
The government is on track to fall 160,000 properties short of its target of 1.2m new homes in the five years to mid-2029, according to the latest Master Builders Association figures.
Dutton rubbished suggestions that the Coalition wasn’t tackling supply-side problems, pointing to its proposed $5bn infrastructure scheme that it claims will unlock 500,000 homes.
“We are the only party that is addressing the supply side and by providing an opportunity to young Australians,” Dutton said.
“It kills me to hear young Australians saying ‘I’m working hard, we’re both working hard, we’re putting money aside, we just can’t afford – we don’t think we’ll ever be able to afford a home’.”
Dutton’s own son, 20-year-old apprentice carpenter Harry Dutton, made an unusual appearance alongside his father at Monday’s press conference.
“I am saving up for a house and so is my sister, Bec, and a lot of my mates, but as you probably heard, it’s almost impossible to get in, in the current state,” the younger Dutton said.
“So I mean we’re saving like mad but it doesn’t look like we’ll get there in the near future.”
Dutton, who reportedly made $30m worth of property transactions in the past 35 years, was asked if he would help his son get a house.
The opposition leader ignored the question, instead continuing a monologue about why Australians should vote Liberal at the election.
