Mortgage advisers are recalibrating their risk models after Anthony Albanese’s government secured a second term on Saturday, pledging a more muscular role for Canberra in housing supply, rent regulation and cost-of-living relief. Economists say the policy suite is unlikely to derail price growth in Australia’s tightest metropolitan markets, but it will reshape the composition of demand and the way lenders gauge household capacity to service debt.
Our View: “A Labor win points to slower, more inclusive growth rather than a classic post-election surge, for first-home buyers and recent migrants the signal is net-positive; for geared investors the outlook is modest at best.”
A bigger federal footprint in housing
At the centre of Labor’s program are an expanded Housing Australia Future Fund, a national rental strategy that could pave the way for caps on annual rent increases, and a broader deposit-guarantee scheme that allows borrowers to secure a loan with as little as 5 per cent down — all underwritten by the Commonwealth. Treasury modelling suggests those levers will lift annual dwelling completions by roughly 8,000 over the forward estimates, a figure analysts describe as helpful but hardly transformational when demand in Greater Melbourne alone is rising by more than 20,000 dwellings a year.
Implications by borrower segment
| Segment | Policy tailwind | Practical risk |
|---|---|---|
| First-home buyers | Deposit guarantees and shared-equity expansion cut entry costs. | Scheme places fill quickly; borrowers still face serviceability at 3 ppt above current rates. |
| House-and-land builders | Planned infrastructure corridors in outer suburbs may temper land inflation. | Fixed-price contracts remain exposed to labour cost shocks. |
| New migrants (NZ & Pacific) | Faster pathways to residency support PAYG credit assessment. | Foreign-buyer ban on existing dwellings narrows stock choices; off-plan scrutiny needed. |
| Yield investors | Social-housing spend adds supply at the bottom end. | National rental code could flatten yields in high-cap-ex suburbs. |
Monetary backdrop remains pivotal
The Reserve Bank’s cash rate sits at 4.35 per cent; swap markets have pushed back expectations for a first cut to December, reflecting a slower-than-hoped path to headline inflation’s 2–3 per cent band. Lenders are continuing to test new loans at around 9 per cent. That buffer, combined with Labor’s proposed non-compete ban for workers earning under $175,000, is expected to curb riskier loan structures but could boost refinancing volumes as households explore job mobility.
Construction pipeline and regional spill-over
Labor’s infrastructure map – led by suburban rail extensions in Melbourne and targeted road funding in regional growth corridors – is expected to draw builders and buyers to fringe estates in Mickleham, Tarneit and Officer, where median blocks are still trading below $380,000. Yet materials inflation remains sticky at 6 per cent year-on-year, forcing brokers to insist on tighter draw-down schedules and contingency lines for clients signing fixed-price contracts.
Investor calculus under a rent regime
While Labor is not revisiting negative-gearing concessions in this term, Treasury has flagged a “modern code” for the rental market, including uniform notice periods and potential caps linked to CPI. According to CoreLogic, gross yields in inner-north Melbourne have already slipped below 3.2 per cent; any further compression is likely to push leveraged investors toward regional build-to-rent plays or into high-dividend equities, advisers said.
Outlook: steadier, not softer
Consensus forecasts compiled by the major banks point to national dwelling prices advancing 4 to 6 per cent in calendar 2025, with the inner-metropolitan belt of Melbourne and Sydney leading. A moderation in the rate cycle, coupled with incremental supply from Labor’s housing push, should prevent a breakout in mortgage stress. Still, brokers caution that households relying on two full-time incomes must build larger buffers as real wages recover only gradually.
“The policy mix rewards preparation. The borrowers who pre-qualify early, lock in construction costs, and remain agile on employment will navigate this cycle best.”
This article provides general information only and does not constitute financial advice. Readers should consider their circumstances and consult a licensed adviser before acting on the views expressed.
