How young Aussies face an $85k bill – each! – because of Albo’s economic plans that were meant to help: PETER VAN ONSELEN
Columnist Peter van Onselen argues that the Albanese government's first home buyer policies have left young Australians dangerously exposed as property prices begin to fall. He contends that Labor's five per cent deposit scheme encouraged buyers to take on 95 per cent mortgages, while the government's own inflationary spending helped push interest rates higher and its reversal on negative gearing and capital gains tax pledges was designed to cool the property market, leaving many new buyers now trapped in properties losing value.
The piece claims the combined effect of these policies could leave young Australians facing losses of around $85,000 each as prices fall, having entered the market with minimal deposits and little buffer against negative equity. Van Onselen frames this as a case of government intervention backfiring, with buyers who took up the scheme to get onto the property ladder now bearing the financial risk of a housing downturn that he says Labor's own policies helped bring about.
- Van Onselen says Labor's housing scheme left buyers over-leveraged
- Falling prices could cost young Australians about $85,000 each
- Rate rises and tax policy reversals blamed for market downturn
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Critics of the scheme argue that encouraging first home buyers to enter the market with only a five per cent deposit strips away the financial buffer that protects households against price falls, leaving young Australians disproportionately exposed to negative equity. They contend that stimulating demand without a matching increase in housing supply risked inflating prices further, setting up exactly the kind of correction now unfolding, and that chopping and changing on negative gearing and capital gains tax added further uncertainty to a market first-time buyers were being urged into. On this view, a policy sold as help for young people has instead transferred the risk of a housing downturn onto those least able to absorb it, and governments have a duty to weigh such downside consequences before encouraging citizens to take on highly leveraged debt.
The case against
Defenders of the scheme argue that it was designed to solve a real and urgent problem: without help, many young Australians faced being locked out of home ownership indefinitely while house prices climbed beyond the reach of ordinary saving. They point out that interest rates rose mainly because of global inflationary pressures and independent Reserve Bank decisions, not government spending alone, making it unfair to lay rate rises solely at Labor's door. They also note that property cycles include periodic corrections, that negative equity is only realised if a home is sold, and that most scheme users intend to stay long-term and build equity over time. On this view, abandoning such support would not eliminate risk but simply shift the burden back onto young buyers entirely, while entrenching housing wealth in the hands of existing owners and investors.