Albo’s 5% deposit scheme is a scam.

Labor’s signature housing policy doesn’t make housing affordable. It just speeds up access to unaffordable housing for higher-income earners.

Oct 02, 2025

Labor’s signature housing policy doesn’t make housing affordable. It just speeds up access to unaffordable housing for higher-income earners and launders money to property investors and the banks.

Across the country, fewer than 1 in 4 homes for sale are affordable to the median household. For a median couple living in Sydney, the rate is under 10%.

Smaller Deposits, Bigger Loans

Sure, a 5% deposit sounds nice ✨in theory✨ a nice shortcut into the market. Except it requires you to take on a bigger loan with significantly higher repayments. More interest for the banks, more debt for you.

At first glance, that’s ~only~ about $800 more per month. But because banks cap repayments at 30–35% of income, that small monthly jump means you need about $25k more annual income to qualify. The barrier isn’t so much the deposit anymore, it’s the income needed to service the debt.

5% Deposit Who, What, Where?

A $1.5 million house. Campsie, 14km from Sydney CBD.

In Sydney, the loan cap is $1.5 million. That doesn’t even cover the median house price. To service the maximum loan, you’d need an income of $290k, more than 3x the national median household income. That’s the top 5% of earners.

Even in Adelaide, which sits around the national median, the median house is out of reach for the median household. A $900k home under the scheme requires an income of around $200k, more than 2x what the median household actually earns.

And it’s not just houses. Median apartments in Sydney demand an income of $165k, nearly 2x the median household income. In Adelaide, it’s closer. Just.

So Where Can Median Households Actually Afford?

The median household earns $92K, which supports a home worth about $550K. Only 26% of current listings sit below that price. This includes houses, apartments, and empty blocks of land. Mostly in regional areas, far from where median-paying jobs exist.

A couple both working full-time at median wages ($176K combined) can afford around $1.05M (which is ABOVE the loan cap for every city except Sydney) roughly 70% of the market. In Sydney? That same couple can access under 10% of homes. A single median household? Under 3%.

In a functional market, the median household should be able to afford the median home. When they can’t, they’re forced to compete for cheaper properties, which pushes those prices up and squeezes those earning less. Keep in mind: half of all taxpayers earn less than the median. Wealthier households and investors dominate the top half, buying their 2nd, 3rd, 10th properties, driving prices higher still. The market cascades downward, locking out the bottom entirely.

If The Trend Continues…

House prices quadrupled (4x) over the past 20 years while household incomes grew just 1.48x. This policy does nothing to change that trajectory.

Treasury claims the scheme will have a modest impact. Experts predict 10% price growth in year one alone. By 2045, a 5% deposit will cost what a 20% deposit costs today. The median household will earn one-fifth of what’s needed to service even a 5% loan.

This policy might help some high earners buy slightly sooner. For everyone else (and for future generations) it makes the crisis exponentially worse. Literally.

Make no mistake: this is a policy designed by property investors, for property investors. It does nothing to make housing affordable for the average Australian because it does nothing to address the actual crisis — a crisis caused by treating homes as speculative assets instead of, you know, places to live.

Non-property-investor-brained solutions actually exist. And I lay them all out in my book Better Things Are Possible available in all good bookstores now.

I do this research and writing completely independently. A book purchase or paid subscription ✨really✨ helps me keep going.

If money’s tight right now, that’s okay! A share or comment helps just as much.

Sources & Data

Property Prices & Market Data:

PropTrack Home Price Index (July 2025) - Sydney median house price $1.55M
realestate.com.au (October 2025) - Current listings data showing 26% of 178,887 listings under $550K

Income & Serviceability Analysis:

Compare Club via Domain (2025) - Income requirements for First Home Guarantee scheme by city, based on 30-year loan term, 5.44% mortgage rate, Household Expenditure Measure spending assumptions
Australian Bureau of Statistics (2023-24) - Median household income $92K (Census + administrative data integration)

Policy & Scheme Details:

Housing Australia - First Home Guarantee scheme parameters, price caps by region
ABC News (October 2025) - “House prices to climb as expanded first home buyer scheme kicks off”

All figures and calculations in this article use publicly available data and industry-standard mortgage serviceability ratios (30-35% of gross income for repayments).