First-home policy drives prices up, economist warns

Politicians have been urged to “stop doing dumb stuff” after a claim that 60 years of first-home buyer schemes have only helped the seller.

Independent economist Saul Eslake told NewsWire the schemes added to demand and would only increase the price of housing.

“As my fellow independent economist Chris Richardson often says, stop doing dumb stuff,” Mr Eslake said.

“Anything that allows Australians to spend more on housing than they otherwise would results in more expensive housing and fewer people owning them.”

Mr Eslake’s call comes as the Albanese government expands the 5 per cent deposit scheme for first-home buyers to unlimited places for those trying to get into the market. The scheme starts on Wednesday.

Prior to the changes, the scheme was open to up to 50,000 homebuyers, inclu