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The PROPERTY DOCTORS, Sydney Australia Novak Properties
NOVAK NEWS - Election Promises, what does it mean for real estate?
With federal elections approaching, the perennial promises of housing affordability solutions are back in the spotlight. Stevan Bubalo and Josh Wapshott cut through the political noise to examine what these proposals might actually mean for Australian homebuyers and property investors.
The hosts meticulously break down Labor's flagship "Help to Buy" scheme, which would allow the government to take up to 40% equity in properties for first home buyers, significantly reducing the deposit and repayment burden. They also explore Labor's plans to remove income caps from first home guarantee schemes and commit $10 billion toward building 100,000 new affordable homes over eight years.
Turning to the Liberal Party's proposals, they analyse the potential impact of mortgage interest tax deductions for new builds, which could save homeowners up to $60,000 over five years, and the controversial plan to allow access to up to $50,000 of superannuation savings for home deposits. Both approaches aim to tackle the deposit hurdle that keeps many Australians from entering the property market.
What sets this discussion apart is the historical perspective. Looking back at promises from previous elections, the hosts reveal a sobering reality—most housing initiatives announced during campaigns were either abandoned or significantly watered down after the votes were counted. The numbers tell the story: since 2015, the national median home price has jumped 44%, price-to-income ratios have worsened from 6x to 8-9x average income, and mortgage stress has more than doubled from 20% to 45% of borrowers.
For listeners wrestling with property decisions during election season, the advice is refreshingly practical: "If you can't buy where you want to live, rent where you want to live and buy somewhere else." The hosts suggest that while government schemes may help some buyers, developing a personal property strategy remains the most reliable path to homeownership in Australia's challenging market.
Whether you're a first-home buyer hoping these policies might be your ticket to ownership, an investor analysing market impacts, or simply a voter trying to make sense of housing promises, this episode provides the context and analysis you need for informed decisions. Have questions about your specific property situation? We're here to help—reach out anytime.
Ladies and gentlemen, it is 8pm, Monday Night News. Stevan Boudelot, Josh Wapshot, coming to you now. Guys, Monday, thank you for joining us tonight. A hot topic as real estate agents, it's rare that we talk about somebody else that the public looks at closely, and that's politicians and obviously, election promises. What's it mean for real estate, what's proposed, what are the potential benefits to that? And then we'll take a walk down memory lane and look at what has happened in the past. As you lead up to elections with the promises that are made to us. Josh, you had a bit of a chance to have a look through. What have you got there, mate?
Speaker 2:Yeah, yeah, sure. So what we've got is we've got a few of the promises to change a policy for both Labor and Liberal. So we'll be unpacking those key policies and then just running through a bit of the pros and cons. Obviously, if you own real estate or you're looking to buy real estate, this is probably a topic that's going to affect you. So listen in. But, yeah, buy real estate, um, this is probably a topic that's going to affect you. So listen in, um. But yeah, I thought we'd start off. Obviously, the key key topics for both parties is is around affordability on housing, um. And and entering the market as well, with assistance in, you know, buyer schemes, equity share, um. There's quite a few terms being popped around and some you you wouldn't understand at the first glance, but you know we've we've unpacked this today, so hopefully you'll have a better understanding.
Speaker 2:First, we'll start off with Labor. So a help to buy scheme guys coming in on the Labor Party, and essentially what this is is a. It's an option for first home buyers to essentially own a property partly and that is in the tail of the government actually owning part equity in the home. So that's up to 40%. So what that means there's. Put it easily if you're looking to purchase a million dollar property, essentially the first-home buyer would only have to come up with a paying a mortgage based on $600,000, as the government would take care of the other 40%. The $400,000 and this here is is seen to be an easier way to get in in regards to the deposit. So obviously your deposit 5% is based on the loan amount of the $600,000. In regards to that 40% that the government owns, they retain that until you on-sell the property and there's actually no interest to be paid on the first five years for the new owner.
Speaker 2:So there are a few of the pros and cons. So pros obviously, reduced upfront cost. It makes home ownership more accessible, accessible especially for those struggling with large deposits or upkeeping those large repayments. So quite a few positives there. And I think another big one is this is severely going to impact, I think, the entry-level market in real estate. Um, if this is something that's going to be introduced, guys, think of it. Someone that's, you know, looking to only be able to afford a $600,000 mortgage is now potentially looking at a million dollars. You know, it really brings up the competition as more buyers are now able to afford these entry-level homes getting themselves into the market, so that competition as always drives prices up. So good for any homeowners, good for any first-home buyers getting in the market and we think from this scheme it's a great little kicker for growth. The entry-level market. So your one, two bedders, obviously, your entry-level homes, things like that, cons obviously the government then owns a portion of the property that 40%.
Speaker 2:So either if you once you want to sell that on, sell that property, the government absorbs. If it's a profit or if it's a loss they'll absorb, but that 40% stays. So a bit of an interesting one, but I think for some people that's that's going to be a viable way of getting into the market, the other one being the first home guarantee expansion, so removing income and property price caps. So originally, guys, I believe it is currently 200 for couples, 100 for individuals.
Speaker 1:It sounds about right.
Speaker 2:I didn't do the numbers properly for you but that's about right, yes, so essentially, guys, what this means is they want to uncap, uh, the potential for couples earning. I mean you could be earning whatever you whatever, whatever you want to be earning, uh, there's no caps. So, first, home buyer, five percent deposit will apply to all income levels. Um, the other important thing it's also going to allow you to purchase property. Traditionally I think it was 800, 900. They've moved it up to they want to uncap that value on the property.
Speaker 2:So, guys, first-time buyers, you don't have to look for your unit out of suburb, as some people are going to do in places like, you know, eastern suburbs or the northern beaches of Sydney. You now sort of unlock that potential to move into a home within your area, around friends and family, which is, I think, a great scheme that they probably need to introduce in Sydney, because you know Sydney prices as opposed to you know other states definitely going to need that. So, pros, guys, easier access home ownership to a large number of people and help with good incomes, but struggle with saving deposits. Get into the market with those deposits. Cons it could drive up demand for properties, pushing prices higher for those people trying to get in, but that's also a positive for our landlords. And then obviously, the 5% deposit could lead to higher mortgage repayments for buyers. You know borrowing, yeah. So you're going to be mortgage repayments for buyers. You know, yeah, you're not borrowing the full amount.
Speaker 2:so you're going to be up for a little bit more Exactly right. The next one sort of focuses on the supply. So that's the commitment of $10 billion to investing in buildings. So their aim is to add another 100,000 new affordable homes over the next eight years. Guys, the traditional supply and demand. With everything the higher supply comes up, it meets the demand, which means your pricing obviously is more likely to stabilise or fall. With that supply coming on, you have less people competing over the same property. So obviously the pros there more affordable housing options. So obviously the pros there more affordable housing options which could help with long-term supply issues. But it's more of a long-term strategy, guys.
Speaker 2:These sort of introducing supply to the market generally takes a bit of time to have its impact on the market. So although long-term it will help in the future Cons, it's a long-term plan. Like I said, it may not be felt for a couple of years and also that applying to new builds, that may not be desirable to all buyers buying a new property. So minimal on the cons there, but I think definitely having that supply hit the market. We've obviously seen the low to mid-rise density changes throughout New South Wales and that's sort of jumping on the back of that, bringing supply that wasn't there previously back on board and hitting the market. Foreign buyer ban this is something we saw with both parties, where there'll be a two-year ban on foreign investment. Obviously, the idea there, guys, is you know your local buyers are purchasing through the market and it opens up obviously more avenues for the local population to buy because you're competing against.
Speaker 2:You know you're competing against a lesser market. So to be so pros there obviously afford affordability. Competitiveness in the market comes down. Cons on that side would be things like obviously your higher end um property, uh, probably doesn't see the uplift that it has in recent years. And then you follow on markets so you know, like luxury items, things like that, basically you hit, you hit that luxury tier through the economy. But yeah, I think again, it's only a two year. So what they'll say is just give a buffer there, helping bring those prices to a more affordable level, switching over to the Liberal Party guys.
Speaker 2:So Liberal. So one interesting one I thought was the mortgage interest tax deductions. So, first, home buyers who buy a new build can claim back interest paid on loans up to 650K, which could mean savings of up to $60,000 over five years. So, guys, again essentially using your tax to pay your interest on your property, again much better being the government's money than your own. So definitely helps with the interest costs and obviously the inflation in interest rates, interest being quite high, let the government absorb this, not its hard-paying taxpayers. Pros immediate relief for first-term buyers, reducing overall cost of a mortgage, and it encourages new builds and can increase supply in the market. Cons it primarily benefits those buying new builds as opposed to the existing. It primarily benefits those buying new builds as opposed to the existing. The impact may be minimal if interest rates are already low. If not, buyers are looking at new homes.
Speaker 2:Next one, guys superannuation access. Essentially Peter Dutton, you would have seen maybe something in this in the news recently accessing up to $50,000 from your super and putting that towards a deposit. Obviously, guys, you know, cost of living only increasing at the moment, that's what it feels like. So this access scheme just allows you to tap into those savings and adding that to your deposit for a new home. Obviously, again, guys, gives buyers more financial freedom and flexibility just in regards to entering the market and deposits and those types of things. Cons, you're obviously touching or eating into your super so it might affect you down the line. But as we see, you know, generally property along the northern beaches every 10 years doubles, so it might not be a bad place to have your super Again.
Speaker 2:They're also looking at have your super Again. They're also looking at income cap increases. So they're rising the thresholds. So people earning up to $175,000, they'll be pushing that up to $250,000, probably trying to play on a more fairer system. If you're making $250,000 combined as a couple, they probably see it as you know. You're in a position to buy a property on your own two feet more, helping the lower income levels there, but again going to up that level on on home.
Speaker 2:So not 900, talking about 1.5 and above now, which again just brings, uh, more flexibility and accessibility for first-time buyers. Then Then again, making this more accessible, more affordable, is only gonna make these properties more desirable and have more buyers looking at your property. In turn, competition builds those above average results in terms of the sales. So you've got a good looking property that more than one person is looking after. All of a sudden, that five people looking now turns into 10 with all these new schemes. So quite exciting and I think it's going to be a real good impact for the markets. If you want to elaborate a little bit further on that and where it all goes, so being a little bit older, than.
Speaker 1:Josh, this isn't the first time I've seen a federal election, not the first time we've been promised property changes in a federal election, and what I've done is I've actually gone back and said, okay, the major parties obviously here in Australia, as politically diverse as we say it is, it's a two-party system and both parties are pitching their best to get your vote. Now let's go back, and it's great and well to look at what we're saying, but how have these parties performed in the past? What have they delivered on what they promised us in the past? And, you know, is this an indicator of what's in the future? So, essentially, I've stepped back to 2022 just to talk about some of the policies that were discussed at that time and let's see if they were implemented by the Liberal Coalition Party or the government, I should say at that time, or the Labor Party. The Greens voiced a little bit of an opinion in there too as well. But essentially, going back to 2022, scott Morrison was running the Liberal Party at that time. There was a big push on super, very, very similar to what has been announced today. There was an initiative of up to $50,000, or 40% of your superannuation holding to be used to be applied to purchasing a home Didn't happen, wasn't really put into effect. There was a play at utilising your super to buy property, but you could only really access funds that you had self-contributed into your super fund, so voluntary contributions. You could access that amount towards property purchasing. The rest of the super you could not. So I do think this was discussed in 2022. It's being discussed again today Whether or not it's implemented now. I do think this will be something in the future that we probably will see, but as of yet, look didn't really gain a lot of traction in 2022. We'll still talk about it today.
Speaker 1:There was something that got a little bit of traction. That was a regional home guarantee 10,000 guarantees from October 22 to June 25. It was really in place to encourage Australians to look at regional areas, moving into regional spaces, buying property out there, and there was a pretty. There was a decent uptake of this. There were a few little hindrances to it. One is obviously employment is huge. If you're looking at moving to a regional sector, you've got to have the employment there to obviously you know um, draw the income to make repayments and obviously live, live, live life. How you may choose um out there, it was open to um, non home buyers um, non-first home buyers, sorry and permanent residents, so targeting a really good portion. Um, that, like I said, did pick up. There was about 20,000 registered parties took advantage of that and took up regional homes. Yeah, across the country. Labor on the other side, they were talking about, obviously, the shared equity that you spoke about earlier, josh. That was also on the table. Look, it really offered, like Josh said, buyers with a lower financial barrier the accessibility to get into there. They tried to help lower income families to get into property. So I think the initiatives were good behind it. Whether or not I want, you know, the Prime Minister or any politician being my roommate in my home, I don't know, probably not in my opinion, but I can understand where they're coming from in trying to help Australians get into a property. I think there might be a catch to this. So just be aware, australia, if you're looking at that moving forwards Legislation was introduced in 23.
Speaker 1:Look, it hasn't really kicked off yet. It's still a discussion today, so still kind of in play. Housing Australia Fund there was a discussion of putting aside $10 billion to build 30,000 new affordable and social homes. They were really trying to assist Australians that were in a tough spot. You know whether it's domestic violence, you know veterans, frontline workers, people that really really needed help, again coming from a good spot with it. As of 2025, over 6,000 homes have been built and expecting a full rollout of that 2026, 2027. So they've implemented one.
Speaker 1:And the last one was there was something called the National Housing Accord, where it was attempted to be like a joint effort between local councils, government, private, the private sector in developing more properties, infrastructure. Very limited building costs are limited, so not really introduced at that time. The only other thing really was that the Greens came in and said we can help Australia too. Fantastic thing really was that the Greens came in and said we can help Australia too fantastic, and they proposed to build a million dollar. Well, to build one million public and affordable homes over the next 20 years running at a cost of approximately five billion dollars per year. So you can see that that was scrapped pretty quickly and didn't really get much traction so quickly and didn't really get much traction. So I guess really, out of the key discussions in 2022, one or two have got a little bit of traction, but that's about it.
Speaker 1:Looking at it and looking back. I guess what was the most. I kind of did some research to say, okay, what's been the best received scheme that we've had in place or initiative put in place? Really, what they did is in 2020 there was a discussion about 5% deposits. The government was saying, look, we'll cover the LMI Lenders, mortgage Insurance, and that saw a good intake, but just not enough spots offered to really help the market um, overall. So in a recap, a lot will be promised to us as australians, as future homeowners. They'll be telling us about the future of our children and how it's all going to be beneficial to them.
Speaker 1:The results speak for themselves. I don't. I don't know that the politicians are just telling us what we want to hear Based on their track record. I've gone back and said, okay, let's do the numbers on 2015 versus 2025, and let's see if the dream of owning an Australian home has improved or not. And in a quick summary, look the national medium home price in 2015, $520,000. Today, $750,000. This is nationally, so that's up 44%. So that hasn't improved. Price to income ratio in 2015, it was six times the average income to the median house price. Today, eight to nine times that price. So that hasn't improved. The average mortgage rate 4.5% in 2015, 6 to 6.5% today, and then with a survey of mortgage stress 20% of borrowers indicated mortgage stress in 2015 as opposed to 45% today. So the government, regardless of who it is or who's been in power, really, as a summary, I don't want to say has improved our property position much at all.
Speaker 1:And in saying that, I think if your strategy is to bank on the government to help us out of this hole or to help identify, you know, concerns in the market, it may not be the wisest choice. We recommend, you know, try to get into real estate. Be the wisest choice. Um, we recommend, you know, try to get into real estate early. Invest. Don't necessarily look. If you've got a budget that only supports a certain market, go and buy in that market. You know, build up an investment property. You can always, you can always go from there, but the hardest one's the first one, and then, obviously, moving forward from that would be my best strategy. We're going to get a lot more promises between now and election day, but, um, the numbers, the numbers don't lie. Um, so, guys, keep, keep your heads on. Just um, yeah, invest in property, but I'd say, if you can't, if you can't buy where you want to live, rent where you want to live. If you can afford that and go and buy somewhere else, put that money into property definitely.
Speaker 2:I think it's um. You know, under the under, under, under it all, you can pretty much say that property prices for our entire financial system needs to be stable. So as much as uh. They put all these schemes together, guys, to get you into the market. If this market was to go belly up, there'd be a lot to come with it. So jump on board of the, the idea that the, the government, will always stabilize that, that market. And there's a reason why we've had such good averages of growth every year in the property market. It's probably because it's needed to.
Speaker 2:Um, I think the superannuation is going to be something that probably gets unpacked more and more guys. Per capita, I think we're number two in the world, um, for the amount uh is held in in super. It's almost more than the stock market in in our super. And you know I, I really see, I really see a struggle of them being able to take down. You know where we're at in terms of living expenses and things like that. Um, I probably see this as the only option of you know getting people into that market with these untouched funds. So keep an eye out on this, on this space. I think, entry-level stock, with these policies and with the way everything's trending is going to do really well. So that would be my take on it all in a positive way.
Speaker 2:My take would be I don't know that I want to share a room with Albo or the other gentleman as well.
Speaker 1:Dumb, yeah, dumb.
Speaker 2:Neither I don't know about that one. Pretty scary wake up hey.
Speaker 1:Definitely. Ladies and gentlemen, thanks for joining us. By no means are Josh and I political analysts or commentators. We have our own views on things, but if we can't help you with any property needs, just reach out anytime.
Speaker 2:See you guys, good night.
Speaker 1:Thank you.