Policy Changes Stir Debate on Affordability in WA

As housing affordability remains a top concern for many Australians, the federal government’s plans to expand homeownership incentives have sparked both optimism and caution. While these initiatives aim to support first homebuyers, experts warn that without addressing the root cause – housing supply – the result may be a further surge in prices, particularly in supply-constrained markets like Western Australia.

The federal government’s proposed expansion of the Home Guarantee Scheme has been welcomed as a lifeline for first homebuyers. By lowering the upfront costs of homeownership, such programs are designed to help more Australians enter the market. However, leading economists and property experts caution that these measures, while well-meaning, could have unintended consequences if not paired with strategies to boost housing supply.

In Western Australia, where the rental market remains incredibly tight and housing construction is lagging, demand-side support may drive up prices. The scheme enables eligible buyers to purchase a home with as little as a 5% deposit, with the government guaranteeing the rest – but in a market with low stock, this can intensify competition. The added demand may benefit existing property owners but could push prices further out of reach for many.

Critics of the policy argue that helping more people buy homes is only half the solution. Without sufficient new housing being built, there simply aren't enough properties to meet the increased demand. In WA, where construction costs and labour shortages have delayed building timelines, this imbalance is particularly pronounced.

The importance of pairing demand incentives with supply-side reforms is not new. Experts consistently point out that easing planning restrictions, unlocking land, and investing in skilled labour are essential if housing affordability is to improve. Without these, incentives for buyers may ultimately benefit sellers more – by inflating prices in an already heated market.

While the intentions behind the Home Guarantee Scheme are positive, Western Australians should be aware of the broader implications. For real and lasting change in housing affordability, targeted support must go hand in hand with strategies to increase supply. Otherwise, the dream of homeownership could remain out of reach for many, even with government assistance.

Government incentives for first homebuyers are a step in the right direction, but unless they’re accompanied by efforts to boost housing supply, WA may see price growth outpace affordability. It’s a delicate balance – one that requires long-term thinking beyond election cycles.

If you'd like to talk about how this will affect your property plans, don't hesitate to contact the team at Bellcourt on 08 6141 7848.