Prime Minister Anthony Albanese is set to unveil a plan to allow all Australians looking to climb onto the property ladder to buy their their first home with a 5 per cent deposit, avoiding lenders mortgage insurance (LMI).
The proposed expansion of an existing, income-capped program would instead be made universally available for a wider range of homes by a re-elected Albanese government.
Under the landmark housing package to be unveiled on Sunday, the federal government would also put $10 billion towards building up to 100,000 homes exclusively for first homebuyers.
The plan is part of a bid to tackle Australia’s housing affordability and court young voters ahead of the May 3 federal poll.
The 5 per cent deposit guarantee would allow thousands of Australians to sidestep the traditional 20 per cent hurdle, potentially slashing years off the time it takes to save for a home.
“When a young person saves a 5 per cent deposit, my government will guarantee the rest with their bank,” Mr Albanese said.
“This will help people buy their first home faster, without paying the burden of Lenders Mortgage Insurance.”
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Some 50,000 Australians a year already access the income-capped version of the scheme, but the government expects that number will grow to nearly 80,000 after the expansion.
The commitment builds on the Albanese Government’s existing $33 billion investment in housing, taking the total package to $43 billion — which Labor claims is the largest housing investment in Australia’s modern history.
From January 2026, following industry consultation, every first home buyer will be eligible to purchase a home with just a 5 per cent deposit, while the government guarantees up to 15 per cent of the loan value — eliminating the need for LMI, which currently costs the average buyer around $23,000.
The government will also raise the price caps for properties eligible under the scheme to ensure it benefits a broader range of first home buyers, especially in areas like Sydney and Melbourne where average dwelling prices are much higher.
The scheme will not have income caps or a limit on the number of places available.
Sydneysiders will be able to buy their first property for as much as $1.5 million with a $75,000 deposit, while a Queenslander could purchase an $850,000 home with a $42,500 deposit.
| Capital city | House price limit for scheme |
|---|---|
| Sydney | $1,500,000 |
| Melbourne | $950,000 |
| Brisbane | $1,000,000 |
| Perth | $850,000 |
| Adelaide | $900,000 |
| Hobart | $700,000 |
| Canberra | $1,000,000 |
| Darwin | $600,000 |
Regional centres within a state will have the same price limits as the state capital.
For example, Newcastle would have a $1.5 million limit to match Sydney.
Other regional areas would have smaller limits, different for each state or territory tied to the average price for housing there.
Meanwhile, the government says it will commence construction on 100,000 homes — reserved solely for first home buyers — in 2026-27, with owners able to move in from the following financial year.
The rollout will be a joint effort in partnership with states, developers, and community housing providers.
Housing Minister Clare O’Neil described the reforms as “nationally game-changing” and told the ABC that deals would be struck with the states on day one of a re-elected Albanese government to set a new course for housing.
“We’ve got a housing crisis in the country that’s been a generation in the making,” she said.
“In our first term we laid really important foundations to address the housing needs of Australians, in our second we want to go further, much further.”
As the campaign trail heats up, Labor’s housing policy marks one of the most significant plays yet in a contest likely to be decided by cost-of-living pressures, generational opportunity, and economic confidence.
And the choice of Perth as the backdrop for this signature policy announcement is no coincidence.
Western Australia delivered a 10.5 per cent swing to Labor in 2022, helping the party secure four additional seats in the state.
Mr Albanese hopes to repeat his success and signal the government’s determination to retain — and potentially expand — its foothold there.
