Coalition, Labor housing policies expected to increase prices

Economists warn that both the Labor and Coalition parties' housing policies may exacerbate price pressures in the real estate market. Coalition leader Peter Dutton's proposal to allow tax deductions on mortgage interest payments is expected to raise house prices, while Labor's plan to lower minimum deposits to 5% could also lead to increased costs, albeit to a lesser degree. Independent economist Saul Eslake highlighted that any initiative allowing buyers to spend beyond their means tends to inflate housing prices and reduce market entry for others. Critics argue that these demand-side policies will push first home buyers into taking on riskier debts, deceiving them into believing that housing will become more affordable. Labor has also proposed measures to reduce demand through immigration controls and a ban on foreign investors for two years. Both parties face scrutiny as they approach the election, with concerns that their strategies may ultimately fail to resolve the housing affordability crisis.