**Title: Albanese Acknowledges Home Buyer Scheme May Raise Prices**

Prime Minister Anthony Albanese has acknowledged that the government’s new first-home buyer deposit scheme could lead to higher house prices. The initiative, announced by Housing Minister Clare O’Neil, allows eligible first-home buyers to secure a mortgage with just a 5% deposit, effective immediately.

During a press conference, Albanese admitted that the scheme would exert upward pressure on housing prices. "Well, it will have a minimal impact. There will be a slight increase in prices," he stated. Despite this, he noted that approximately 185,000 Australians have already benefited from the program, which he claims has had a minimal effect on overall prices.

The Prime Minister emphasized that the scheme aims to help more young people achieve home ownership. He mentioned that modeling suggests only a "very small increase" in prices, while the government is also working on increasing housing supply. "We have that incentive for state and territory governments as well, a $3 billion incentive for them to deliver more homes," he added.

However, the government’s goal of constructing 1.2 million homes by 2029 is increasingly in doubt, with reports indicating that 60,000 promised homes have yet to be built. The deposit scheme is part of a broader $43 billion housing agenda aimed at boosting supply nationwide.

O’Neil described the initiative as "life-changing stuff" and a significant expansion of home ownership opportunities. She highlighted that the scheme could reduce the time needed to save for a deposit in cities like Sydney from 11 years to just two or three years. In Melbourne and Brisbane, the time could be cut by five years, while Adelaide buyers could see a reduction of five years and seven months.

Despite the potential benefits, concerns have been raised about the impact of the scheme on housing prices. The Insurance Council of Australia has warned that it could increase home prices by as much as 10% in the first year. In contrast, Treasury modeling predicts a much smaller impact of 0.5% over six years.

Critics, including shadow housing minister Andrew Bragg, argue that the scheme has shifted from a targeted initiative to one that could benefit wealthier individuals. He stated, "Labor has opened the 5% government mortgage scheme to everyone without any means testing. It’s gone from a targeted scheme to a product for the children of billionaires."

Concerns about rising debt levels among first-home buyers have also been voiced. Peter Tulip, chief economist at the Centre for Independent Studies, warned that while the scheme addresses a real issue, it does so in a risky manner. "It does address a real problem, but it does so in a fairly risky, dangerous way," he said.

As of September, the median property value in Australia reached $857,280, marking a 0.8% increase, according to property analytics firm Cotality. The government believes that tens of thousands of home buyers will take advantage of the new scheme in its first year, but the long-term effects on the housing market remain uncertain.