Australia doesn’t need more schemes to help people buy overpriced properties. It needs a housing revolution that treats homes as places to live, not assets to trade, writes Marcus Strom
The federal government’s expanded First Home Guarantee scheme – which came into effect on 1 October – is being hailed by Labor ministers as a “practical step” to help Australians into the housing market. Under the program, the Commonwealth will underwrite your home loan and act as guarantor for up to 20 per cent of the loan so you don’t need to pay lenders’ mortgage insurance for anyone who can scrape together a 5 per cent deposit, or a 2 per cent deposit for single parents.
While this may sound like a lifeline for first-home buyers locked out of an overheated market, economists are warning it could make a bad situation worse, heating up the market without providing adequate, secure housing.
More than that, it fails to challenge the core driver of the housing crisis – the fact that under capitalism the places where people live, eat, laugh, cry and love is a commodity to be traded for profit – or rented in absentia – rather than a social good organised on the basis of need.
The scheme is meant to ‘help people on to the property ladder’. In Sydney, Australia’s most expensive market, the maximum property price allowed in the scheme has increased 167 per cent to $1.5 million and there is now no income cap required to be eligible. What could go wrong?
Enslaved to a mortgage or landlord
CoreLogic data shows median house prices have surged more by nearly 40 per cent since the pandemic, with median price for a Sydney home now around $1.2 million. This still means that if you were to take ‘advantage’ of the scheme in Sydney for such property, you’d need a deposit of $60,000 and have mortgage repayments of $1500 a week on a 30-year mortgage, which would swallow up the entirety of the median wage.
For a home unit, the median price in Sydney being more than $850,000, the equation is a $42,500 deposit and a mortgage of about $1000 a week.
While wages have climbed under Labor in government, this is being swallowed by rents and rising home prices. In May 2025, the average fulltime weekly income was $2010. The most recent data on median weekly earnings, from August 2024, was $1396 for all workers.
New data this month shows rents have increased 44 percent over five years, with the median asking rental for a unit in Sydney hitting $750 a week, a jump of 4.9 percent
The whole premise of this system is workers should submit to spend their lives working just to spend a huge proportion of their income to keep a roof over their head, either to a bank through a mortgage or to a landlord through rent.
A ridiculous way to organise accommodation and shelter, perhaps humanity’s first need after food and water.
‘Stop doing dumb stuff’
Even within the scope of capitalist economics, the scheme has its detractors.
Economist Saul Eslake told news.com.au “anything that allows Australians to spend more on housing than they otherwise would results in more expensive housing and fewer people owning them”. He urged governments to “stop doing dumb stuff”.
Last week under the spotlight at Senate Estimates, Reserve Bank Governor Michele Bullock said the scheme was likely to see young homebuyers more likely to take out ‘riskier loans’.
The Grattan Institute has made similar criticisms, noting that policies aimed at helping buyers – from first-home buyer grants to stamp duty concessions – tend to inflate prices by allowing people to bid more, rather than by making homes more affordable overall.
Ahead of the election, the Grattan Institute’s Brendan Coates pointed out that the new scheme was just going to support home buyers who could already afford to enter the market without government assistance.
“The policy is unlikely to raise the rate of home ownership, since those struggling to afford a home are already eligible for the scheme. Abolishing the income caps will bring higher-income earners into the scheme – and they are already likely to buy a home anyway without the government’s support,” he said.
Already since February when the Reserve Bank started cutting interest rates, property prices have climbed 5 per cent.
ABC News reported that real estate agents are expecting to see a spike in demand for entry level properties, driving up their price, now that the Housing Guarantee is in force.
In other words, the scheme might help some individuals in the short term, but it risks entrenching and overheating the very system that created the crisis: a market where housing is treated primarily as an investment vehicle rather than a social good.
That’s why deeper, more radical analysis and solutions are needed that go beyond tweaking the market. As many in the socialist and labour movement have long argued, the real problem lies in the commodification of housing itself.
Public housing for all, not just the poor
While calling for an end to negative gearing and the removal of the discount on capital gains tax would be more equitable, a first step towards a more permanent solution would need to move away from an obsession with putting people into the ‘property market’ and instead focus on delivering homes through a massive building program in the public sector.
At its heart, the liberal bourgeoisie and their political operatives in the Labor Party see social housing as something to do for the ‘housos’ and ‘povvos’. That is, they see it as social welfare at best, or a noblesse oblige, rather than a collective solution for all of us.
But in European cities like Vienna – regularly recognised as one of the most liveable cities on Earth – most people live in social or rent-controlled housing. We should collectively aspire to do something similar, but on an even grander scale.
Housing should be built for social need from the collective wealth of this country. We shouldn’t have to spend our working lives feeding a mortgage or a landlord.
Even my union MEAA is promoting the myth of liberty through property by offering Student Loan Relief Grant from the NSW Journalists’ Benevolent Fund. It is offering a one-off payment to reduce student debt to “help young journalists in NSW start their home-ownership journey”. It is eligible to any member under 35 who doesn’t own property.
For socialists, liberty can only come about through the abolition of private property.
Private renting and individual home ownership act as fetters on human freedom, with people at the whim of landlords, or spending a lifetime of wages on mortgages.
A republican government should support and fund innovative, interesting, high-quality social and cooperative housing for all, with rents a token.
This proposal envisions a publicly owned and democratically managed housing system – one that invests in large-scale, high-quality social housing, supports housing cooperatives, guarantees lifelong tenancy, and allocates homes based on need rather than market speculation.
To catch the imagination of the population, such housing must be a more attractive offering for all workers – secure, affordable, high-quality. They must feel like homes for life, not merely ‘government assigned dwellings’.
Rather than house ‘welfare cases’ in public housing slums, it envisages entire neighbourhoods with socially provided housing, self-managed by communities.
This isn’t utopian, it is immensely practical. It’s a return to the kind of mass public housing programs that once formed the backbone of postwar reconstruction here and in Europe – before neoliberal governments sold them off and left working-class people at the mercy of banks and developers.
The current Home Guarantee Scheme signals a failure to confront the structural roots of the housing crisis. Without massive public investment in housing construction and a move to decommodify shelter, the dream of secure, affordable housing will remain just that – a dream.
Australia doesn’t need more schemes to help people buy overpriced homes. It needs a housing revolution that treats homes as places to live, not assets to trade.