Anthony Albanese’s guidelines to help first-home buyers have failed to keep pace with rising property prices in Australia’s capital cities.
The First Home Guarantee allows newcomers to access the real estate market with a 5 percent deposit.
But fixed thresholds are proving useless during a housing affordability crisis, which has seen prices rise despite severe interest rate hikes.
Labor won the 2022 election and the prime minister has promised to continue the policies of his Liberal predecessor Scott Morrison.
But the threshold for Brisbane, Adelaide and Perth is much lower than Melbourne’s, even though average house and unit prices in those cities are now more expensive than in the Victorian capital.
A spokesperson for Housing Minister Clare O’Neil defended Housing Australia’s existing thresholds.
“Housing Australia reviews price caps annually in line with prevailing local market conditions,” he told Daily Mail Australia.
In Brisbane, the threshold for the First Home Guarantee is $700,000, although the Queensland capital now has a median house price of $875,040, following a 15 per cent annual increase, CoreLogic data showed.
Anthony Albanese’s guidelines to help first-home buyers have failed to keep pace with rising property prices in Australia’s capital cities (pictured outside his home in Marrickville, in Sydney’s inner west)
Perth has a $600,000 cap despite the median house price being $785,250, following an annual price increase of 24.4 per cent.
Adelaide also has a $600,000 cap despite having a median house price of $790,789, after a 14.9 per cent annual increase.
Melbourne is capped at $800,000, which is slightly more than its median house price of $776,044, after prices fell 1 per cent in the year to August.
The $800,000 cap for Victoria’s major regional cities would help someone buy a home in North Geelong, where the median house price is $697,373.
But the plan’s $700,000 cap for Queensland’s regional centres would be useless on the Gold Coast unless someone buys an apartment.
Even the Gold Coast’s most affordable suburbs are well above that threshold: Coomera has a median house price of $882,784.
That means a first-home buyer wanting something on the Gold Coast would have to buy an apartment, but could barely make it to Southport, where $700,927 is the median price.
Surfers Paradise has an average unit price of $758,211.
Sydney’s $900,000 threshold is well below the city’s median house price of $1.18 billion.
Sydney’s $900,000 threshold is well below the city’s median house price of $1.18 billion, up 5 per cent annually.
A first-time home buyer would also struggle in a remote suburb like Tahmoor, where the median house price is $926,815, meaning someone wanting to be closer to the city would have to buy an apartment.
The $900,000 limit for major NSW centres would be a big hurdle for someone from Newcastle, as a mid-range suburb like Charlestown has a median house price of $928,851.
But a first-home buyer would have better luck moving to a Lake Macquarie suburb like Booragul, where $743,879 is the midpoint.
The plan would be more suited to Hobart, with a $600,000 cap not far below the median home and unit price of $655,114.
Darwin has a limit of $600,000, which is well above the median home price in the city of $504,367.
Canberra’s $750,000 threshold is below the national capital’s median house and unit price of $845,875, but an outer suburb like Charnwood has a median house price of $690,774.
The plan’s $700,000 cap on Queensland’s regional centres would be useless on the Gold Coast unless someone buys an apartment, but Surfers Paradise (pictured) has a median unit price of $758,211.
Under the First Home Guarantee, the borrower provides a 5 percent deposit and taxpayers cover the remainder of the 20 percent deposit, so the home buyer does not have to pay the lender’s mortgage insurance.
The thresholds also apply to the Family Home Guarantee, which a single parent can access with a 2 per cent mortgage deposit.
The Regional First-Time Homebuyer Guarantee allows someone to come in with a 5 percent deposit.
Housing Australia, a federal government agency, reviews its thresholds each financial year, but the new ones would not come into effect until July 2025, in time for the 2025-26 financial year.
National house prices rose 7.1 per cent in the year to August to $802,357, despite 13 interest rate hikes by the Reserve Bank in 2022 and 2023.
Prices fell in Melbourne after the Victorian government introduced a $975 annual levy on investors, but rose in all other mainland capitals following an influx of population from overseas or interstate migration.
