Albo’s radical plan to help struggling first home buyers

Anthony Albanese has launched a bold pitch for voters locked out of the housing market, adopting a radical policy which would see the government co-purchase a slice of their property.

Mr Albanese will on Sunday unveil the $329 million scheme, which is very similar to a bold vision pitched by the Grattan Institute earlier this year.

Labor argues its “Help to Buy” scheme will get more low and middle income earners into the market with a smaller deposit and mortgage.

“After nine long years in government, housing affordability has only got worse under the Liberal-National government,” Mr Albanese said.

“Help to Buy is part of Labor’s plan to tackle the housing crisis.”

Under the plan, a Labor government would provide an “equity contribution” of up to 40 per cent of the price of a new home and 30 per cent for existing dwellings.

The owner would not have to pay rent on the government’s share of the property.

Under the proposal, the government would recoup its share of the investment when the house is eventually sold.

Owners would also be able to buy further stakes during their ownership period.

In order to qualify, the buyer would need just two per cent deposit and be eligible for a loan for the rest of the purchase price.

It would be open to individuals on up to $90,000-per-annum and couples with an income of $120,000 per year.

There would also be a cap on the value of the property which could be purchased under the scheme – up to $900,000 in Sydney, $850,000 in Melbourne, $650,000 in Brisbane and less for other states and regional areas.

The police is aimed squarely at young people who have been locked out of home ownership due to skyrocketing house prices amid low interest rates.

From 1981 to 2016, home ownership rates among 24 to 34-year-olds fell from 60 per cent to 45 per cent, according to census figures.

The Scott Morrison government earlier this year expanded its First Home Guarantee scheme, under which prospective home buyers can purchase a property with as little as a 5 per cent deposit.