Albanese unveils 5% deposit housing plan for all first home buyers — mixed reactions flood in

Melbourne, April 13, 2025 — Prime Minister Anthony Albanese has made a bold promise ahead of the upcoming federal election: if re-elected, his government will allow all first home buyers in Australia to purchase a property with just a 5 per cent deposit — and without paying Lenders Mortgage Insurance (LMI).

Announced on Albanese’s verified Facebook page this morning and quickly covered by major outlets including the ABC, the new policy marks a dramatic expansion of an existing income-restricted scheme. Under the revised plan, starting January 2026, income caps and participant limits would be removed, making the benefit universally accessible to first home buyers across the country.

Albanese stated, “When a young person saves a 5 per cent deposit, my government will guarantee the rest with their bank. This will help people buy their first home faster, without paying the burden of Lenders Mortgage Insurance.”

$10 Billion Pledge for First Home Buyer-Only Housing

Alongside the deposit scheme, the federal government has also pledged $10 billion to construct 100,000 new homes exclusively for first home buyers. Construction is expected to begin in 2026–27, with the first wave of buyers moving in the following year. This initiative will be carried out in collaboration with state governments, property developers, and community housing providers.

Housing Minister Clare O’Neil labelled the proposal “nationally game-changing,” stressing that Labor aims to set a new course to address Australia’s decades-in-the-making housing crisis. “In our first term, we laid the groundwork. In our second, we want to go much further,” she said.

Broader Access and Increased Price Caps

The plan includes raising price thresholds on eligible properties to reflect regional variations in the housing market. For instance, a first-time buyer in Sydney could purchase a $1.5 million home with a $75,000 deposit, while in Queensland, a buyer could enter the market with $42,500 on an $850,000 home. Regional centres like Newcastle will share the same property caps as their state capitals.

According to government projections, the scheme could expand from helping 50,000 people annually to nearly 80,000 once the reforms are implemented.

Combined with Labor’s existing $33 billion housing investment, the new commitments bring the total to $43 billion — touted by the party as the largest housing investment in modern Australian history.

Online Backlash: “It’s Not Enough”

While the announcement has garnered attention and support, it has also sparked a wave of criticism online. Within just 25 minutes of Albanese’s Facebook post, over 300 comments poured in — a mix of hope, frustration, and scepticism.

Critics have raised concerns that the plan does little to address the root cause: soaring property prices.

Alinta Woodhouse asked, “How’s that help anyone? With the current cost of living and ridiculous rents, how are people supposed to save even 5%?” Pete Kelly echoed that sentiment, calling the policy “idiotic behaviour by both sides of the coin,” warning that inflated house prices could ultimately collapse the market.

Others questioned whether average Australians could realistically service the massive loans that would still be required. Daniela Guertler commented, “Do better! Unfortunately, the average income earner cannot afford a loan for 95% of a property’s value.”

Leesh Joblin added, “People can pay the mortgage once they have it — but getting there is the real struggle with low wages and $600+ weekly rent for an old three-bedder.”