The Property Pack

The Times Property

Transforming Renters into Homeowners: A Policy Shift in Australia's Housing Market

  • Written by Scene Magazine

In the face of Australia's escalating property crisis, a promising solution has been put forward that could substantially ease the path to homeownership for countless renters. Eric Wong, an experienced real estate expert from Lucca Property, has identified a significant barrier in the current housing market: although many tenants can comfortably manage their rent, the high demand for a 20% deposit makes purchasing a home an unattainable dream for most.

Understanding the Rent-Mortgage Paradox

Rent prices in urban centres are steep, with figures like $1,000 per week being commonplace for a modest two-bedroom apartment in areas such as Parramatta. Intriguingly, these rent payments often equate to what mortgage repayments would be for the same properties, typically priced below $700,000. Despite this, the standard requirement for a 20% deposit places homeownership beyond the reach of many capable renters. This situation highlights a disconnect in the housing finance system that disproportionately affects middle and lower-income families, who find it difficult to accumulate such substantial savings.

Proposed Policy Change: Subsidising LMI

Wong proposes a straightforward yet potentially transformative policy adjustment: the subsidisation of Lenders Mortgage Insurance (LMI) by either Federal or State Governments. This change would reduce the required deposit to an accessible 5% to 10%, enabling more renters to cross the threshold into homeownership. By reducing the upfront financial burden, the government could effectively turn rent expenditures into investments in property, providing long-term financial security for individuals and families.

Economic and Societal Implications

The benefits of such a policy are manifold. Economically, it would encourage property ownership, which in turn stimulates related sectors such as construction, home improvement, and real estate services. Socially, homeownership is linked to numerous benefits including increased community cohesion and improved educational outcomes for children, as stable homes provide a consistent environment conducive to learning.

Moreover, homeownership is often a critical component of wealth accumulation and retirement stability. By facilitating this transition for renters, the government would not only be supporting individual financial advancement but also bolstering the broader economy.

Ensuring Fairness Through Means Testing

To ensure that the subsidy effectively targets those who need it most and does not exacerbate housing inflation, Wong emphasises the importance of implementing a means-tested approach. This strategy would prevent individuals with higher budgets from leveraging the system to outbid less affluent prospective buyers, thus maintaining fairness and effectiveness in addressing the needs of the intended demographic.

A Call to Action for Policymakers

This proposed shift in policy represents a practical response to the modern economic landscape where rent often mirrors or exceeds mortgage repayments. By re-evaluating traditional models of homeownership financing, the government can create more inclusive economic policies that recognise and adapt to the realities faced by today's Australians. It's a strategic move that would not only stabilise the financial futures of many young Australians but also promote broader economic resilience and growth.


The suggestion to subsidise LMI and lower the deposit threshold presents a viable solution to the housing affordability crisis in Australia. It offers a unique opportunity to convert what is typically a transient expense—rent—into an investment in long-term security and community stability. As policymakers consider Wong's proposal, they face the potential to catalyse significant change, transforming the lives of countless Australians and fostering a more inclusive and sustainable economic future. This is a win-win proposition that demands serious consideration and prompt action from those in a position to make a difference.