Why housing policies by the major parties will push up property prices | The Business | ABC

Economists are sounding the alarm that the housing policy each major party is taking to the election will only drive up property prices. Both policies are aimed at boosting home ownership.
The Coalition's plan would allow first home buyers to tax deduct interest payments for the first five years of a mortgage. But, it only applies to interest paid on up to $650,000 of the home loan.
Domain Group's head of research, Nicola Powell says "the tax deductibility of the interest paid on a home loan for the Coalition, on average, will save somebody $11,000".
Only singles earning up to $175,000 per year or couples earning up to $250,000 a year will be eligible.
While Labor is promising to scrap the income test for its existing first home buyers scheme, allowing them to purchase a property with only a five per cent deposit.
Nicola Powell says "if someone is looking to purchase a million dollar home, they are going to have to save $50,000, but the important part is they are going to need to be able to service the repayments of that home loan of $950,000".
Economists say both policies will push up house prices.
Independent economist Saul Eslake says the biggest winners out of both policies will be those who already own homes.
Some economists say a better way to help first home buyers would be to scrap federal government tax breaks, which the Parliamentary Budget Office estimates will cost roughly $12 billion in forgone revenue this financial year.
Sydney renter Chloe Angel says despite earning a stable middle income wage, she still can't afford to buy a home. She says she's not convinced that either policy will change anything for her.
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