With the Australian Labor Party’s victory in the 2025 Federal Election, their ambitious housing policies are set to reshape the property market for first homebuyers. At Professional Home Loans, we’re here to unpack Labor’s plans, explore their impact on property prices, and share steps to prepare for homeownership in 2025. From lower deposits to new homes, here’s what you need to know.
Labor’s Homebuyer Policies Explained
Labor’s $43 billion Homes for Australia plan targets first homebuyers, aiming to make homeownership accessible. Key policies, announced during their campaign, include:
5% Deposit Scheme for All
Labor’s expanded First Home Guarantee Scheme lets all first homebuyers purchase with a 5% deposit, avoiding Lenders Mortgage Insurance (LMI). With no income caps, a Sydneysider could buy a $1.5 million home with just $75,000 down, compared to $300,000 for a 20% deposit. This starts January 2026, with price caps like $700,000 in Brisbane.
$10 Billion for 100,000 New Homes
Labor will invest $10 billion to build 100,000 homes exclusively for first homebuyers over eight years, starting 2026–27. These homes, built near cities, aim to ease competition with investors, offering affordable options for young buyers.
Help to Buy Shared Equity
The Help to Buy scheme, expanding in 2025, lets eligible buyers (singles under $100,000, couples under $160,000) co-purchase with the government, covering up to 40% of the home’s cost. This reduces your mortgage, with the government’s share repayable later.
Will Property Prices Rise or Fall?
Labor’s policies boost demand by making loans easier, but experts warn this could push prices up short-term. Domain’s Dr. Nicola Powell notes Australia’s supply shortage—falling 160,000 homes short of the 1.2 million target by 2029—means more buyers chasing fewer homes could lift prices, especially in cities like Brisbane ($924,498 median in 2025). Economist Saul Eslake adds that the 5% deposit scheme may help 30,000 buyers but could inflate prices without enough new homes.
Long-term, Labor’s $10 billion investment could moderate prices by increasing supply. If construction meets targets, markets like Queensland may stabilize, benefiting first homebuyers.
Case Study: A Brisbane Buyer’s Journey
Take Sarah, a Brisbane nurse we helped. With a $35,000 deposit, she qualified for Labor’s 5% scheme in 2026, targeting a $700,000 unit. By improving her credit score with Credit Repair Solicitors, she secured a low-rate loan, avoiding LMI. Labor’s new homes plan gave her confidence in finding an affordable property, despite rising prices.
How to Prepare for Homeownership
Labor’s policies open doors, but preparation is key. Here’s how to get ready:
- Check Your Credit: A strong credit score secures better rates. Fix errors early with professionals like Credit Repair Solicitors.
- Save Strategically: Aim for a 5% deposit (e.g., $35,000 for a $700,000 home). Use Labor’s scheme to avoid LMI.
- Research Lenders: Compare rates and terms, as banks may exclude HECS debts from calculations under Labor’s rules.
- Explore Grants: Queensland’s $30,000 First Home Owner Grant can boost your deposit.
Take the Next Step with Professional Home Loans
Labor’s 2025 policies make homeownership more achievable, but navigating the market requires expertise. At Professional Home Loans, we specialize in tailoring loans for professionals, visa holders, and small business owners. Whether you’re eyeing a Brisbane unit or a Sydney home, our team can guide you through Labor’s schemes and secure the best deal.
Ready to buy your first home? Contact us today for a free consultation and start your journey in 2025!
References:
- ABC News: Labor’s 5% Deposit and $10 Billion Plan
- The Guardian: Housing Policies and Price Impacts
- ALP: Homes for Australia Plan