The housing policies of both major parties are bad for Australia’s aspiring homebuyers

‘As a matter of simple logic, if the demand for new homes increases and the supply of new homes doesn’t, then the price of new homes will go up,’ Saul Eslake writes. Photograph: Andrew Merry/Getty Images

Sunday was a bad day for aspiring homebuyers. Both sides of politics proposed policies that will put upward pressure on housing prices – albeit one more than the other.

The Coalition is proposing that, if elected, it will make interest payments on mortgages (up to a maximum value of $650,000) taken out by first home buyers (with incomes of less than $175,000, or $250,000 combined for couples) who purchase newly built houses or apartments tax-deductible for the first five years.