Rebekha Sharkie (Mayo, Centre Alliance) Share this | Hansard source

There is already enormous concern that the government's first home buyer scheme is causing house prices to artificially increase. To recap, the government has created what I and many economists see as a subprime mortgage policy ticking time bomb, where first home buyers can buy a home with a five per cent deposit—and, for single parents, just two per cent. The mortgage insurance for that purchase, between 15 per cent and 18 per cent, is on the hook of the taxpayer should the home buyer default. We don't want anyone to default on their mortgage, but it is a sad reality, and that is why we have mortgage insurance. Mortgage insurance is there, ultimately, to protect the banks. Now it's the taxpayers that are going to be protecting the banks. A Sydney buyer can buy a home of up to $1.5 million with a deposit of $30,000 if they're a single parent. The balance of that mortgage—$270,000—will be covered by the taxpayer. With absolutely no caps on the number of first home buyers that could enter this scheme, and record migration over recent years—for several years now there has been incredibly high migration—we have created an unbelievable set of demands on housing. Yet, despite this, Treasury estimates that this program will increase house prices by only 0.5 per cent.

Domain real estate gurus say that the Sydney median house price grew by 3.5 per cent across the quarter from June to September 2025, with expectations that it will accelerate further in this final quarter of the year. Who in Treasury is accountable for the fact that they come up with these statistics, these calculations, of just 0.5 per cent? What I'm seeing and what many economists are seeing is the pouring of kerosene on a bin fire. The Australian Financial Review reported unprecedented demand on day one of the first home buyer scheme. What does an unprecedented demand do? With anything—bananas, coal, whatever you're selling—unprecedented demand increases the price of the good. According to economist Leith van Onselen from MacroBusiness, the five-city aggregate level saw levels rise by 0.9 of a percent—nearly one per cent in the last 28 days. That's the strongest growth since October 2023. A Lateral Economics report for the Insurance Council of Australia warns that the home guarantee scheme could potentially increase prices from between 3.5 per cent and 6.6 per cent in 2026, with increases to continue for several years afterwards.

The deep concern that I have is that in segments targeted by first home buyers—which are properties defined as those below the individual house caps in every single state and in different regions—the impact is expected to be even greater, with house prices tipped to increase from between 5.3 per cent and 9.9 per cent in one year. This is also causing a distortion in the market. Because this scheme was so rushed and arbitrary decisions were made on what house cap prices are where, in my electorate in the area of Victor Harbor, we're not going to have any first home buyers because the median house price is $740,000. However, they're under the cap of $500,000 for the first home buyer scheme. In Mt Compass, just over 50 kilometres from Adelaide CBD, the median house price is $851,000. It would be under the metro cap if it were applied, but it's not—the country caps applied. However, also just over 50 ks from Adelaide is Sellicks Beach. That does have a median house price that's less than in Mt Compass, but now they have the $900,000 house cap. If you're in Sellicks Beach you're going to see massive increases in house prices. It's distorting the market.

If the government want to fix housing in Australia, they have to look at the demand side and the supply side. What they're doing at the moment is increasing the demand side exponentially. I think we're creating not a dream of home ownership but a nightmare of home ownership for first home buyers. We need to look at who is buying the homes. We need to make sure that it's an 'Australia first' policy—that's what many nations have. We need to look at reducing migration while at the same time increasing our supply.

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