Coalition has promised first home buyers support to get a 20% house deposit
Scott Morrison announced the policy at the Liberal election campaign Sunday
The plan will allow struggling singles and families to get into the housing market
First home buyers will no longer be required to save a 20 per cent deposit when looking to buy a house in Australia.
Both the Coalition and Labor party have made a bid to win over young voters ahead of the May 18 election by promising more financial support when buying a home.
Prime Minister Scott Morrison announced a new scheme at the Liberal election campaign launch in Melbourne on Sunday that will mean a home buyer would only have to save a five per cent deposit.
Labor promised to match the offer if elected.
Under the plan, the Commonwealth would make up the difference between five per cent of the purchase price and the full 20 per cent deposit.
The scheme will allow struggling singles, couples and families to break into the property market, even if they can only stump up a quarter of the deposit typically needed for a house.
This will make a big difference,' Mr Morrison told the party faithful on Sunday.
'Cutting the time taken to save for a deposit by at least half or more.'
Mr Morrison said a similar scheme had been successfully running in New Zealand for a number of years.
Shadow treasurer Chris Bowen said Labor would match the commitment.
'After six years of failure, and six days before an election, the Liberals are desperately trying to tell young Australians they understand their struggles to buy their first home,' Mr Bowen said in a statement.
He said first home buyers knew the Liberals were out of touch and were only for the top end of town.
'We back genuine support for first home buyers - that's why we are also reforming negative gearing for future purchases, so young Australians don't have to keep losing out to wealthy property speculators,' he said.
The Property Council said the deposit plan was a 'smart proposal' and will provide some confidence for the housing construction sector.
'It will deliver some welcome assistance for aspiring first home buyers who have been confronted by the ever-increasing size of the deposit required to buy a home as the market has risen in recent years,' the council's chief executive Ken Morrison said in a statement.
The prime minister said the plan would allow singles earning less than $125,000 a year and couples earning less than $200,000 a year to get into the housing market for the first time.
'The support would stay in place for the life of the loan,' the prime minister said.
'They've got their first leg on the first rung of the ladder.'
The scheme would give preference to smaller banks and non-bank lenders, who will do normal checks on the borrowers to make sure they can meet their repayments.
'This isn't free money,' Mr Morrison said.
The scheme, which would start next year, would run alongside the government's first home supersaver scheme and other state-based initiatives.
Mr Morrison had another dig at Labor's plan to limit negative gearing to new properties and doubling capital gains tax.
'I'll tell you what we won't do, what we won't do is undermine the value of the home you have saved so hard to buy,' he said.
Mr Morrison's proposed scheme sparked a mixed reaction from voters on social media.
'Throwing a few more first home buyers into the fire to prop up property prices. Burn the youth. Save the rich,' one tweeted.
Another added: 'Brilliant idea however this scheme should also be for families who have not had a home for 10 years or more.
'There are many women that have had homes in the past but due to divorce/separation have lost their home & have not been able to save enough deposit to get back in.'