The 2025 Australian federal election has been reduced to a direct referendum on Australia’s housing affordability crisis. Both parties—PM Anthony Albanese’s Labor and Peter Dutton’s Liberal-National Coalition—have placed housing at the center of their campaigns. Record property prices, higher interest rates, and falling homeownership among young Australians have unleashed a perfect storm. The two sides are now advocating competing solutions to help first-home buyers onto the property ladder. With Australia’s future housing landscape at stake, voter anger intensifies, and housing may determine this close-run race.
Labor’s Pitch: More Homes, Lower Entry Barriers
PM Anthony Albanese is going all in on a huge supply push of housing. The Labor Party has pledged to construct 1.2 million houses by 2030, with $10 billion set aside to provide 100,000 houses in collaboration with state governments and investors. The strategy features a First Home Guarantee Scheme that allows buyers to buy houses using a mere 5% deposit—without lenders mortgage insurance.
Additionally, Labor unveiled an instant $1,000 tax deduction for work-related expenses. This measure aims to put more cash in pockets immediately, easing the cost-of-living burden. Anthony Albanese, who grew up in public housing, framed the issue as personal, declaring, “Home ownership should not be a privilege to inherit if you’re lucky.”
Liberal’s Offer: Tax Breaks and Mortgage Deductions
Peter Dutton’s Liberal-National Coalition is proposing a tax-centered solution. Their flagship policy would let first-home buyers claim mortgage interest on loans of up to $650,000 from taxable income. This could save families as much as $11,000 annually, or $55,000 over five years—delivering substantial relief in the first few years of a mortgage.
The Coalition also put forward a one-time $1,200 tax rebate for low- and middle-income earners. Dutton, who has made much of his background as a businessman and ex-policeman, claimed his proposal assists individuals not only in purchasing a home but retaining it, even when interest rates rise.
The Numbers Behind the Crisis
Australia’s housing crisis is worsening. The national median house price is now more than eight times the median yearly income. For the average household, it will take more than ten years to save for a 20% deposit. At the same time, mortgage payments are consuming over 50% of household income—a record high. This is pricing many out of the market, particularly younger Australians and migrants.
Statistics also indicate an increasing supply-demand gap. Vacancy rates for rentals are at or near record levels in Sydney and Melbourne. Economists say the next generation will be excluded from homeownership altogether unless immediate action is taken.
Voters Caught in the Middle
With the May 3 election looming, housing affordability may be the issue that determines it. Labor is selling long-term structural change through supply and affordability. The Coalition is wagering on short-term tax relief and more intelligent mortgage incentives. Both parties are appealing to working families, young voters, and middle-income earners—those most hurt by increasing housing prices.
This is no longer an election about leadership. It’s about who is able to fix the housing crisis before it gets completely out of hand.