The Labor Party’s proposed home equity scheme could expose the government’s balance sheet to financial risk, according to the Grattan Institute.
Labor housing spokesman Jason Clare has revealed it may need to pay interest on borrowings worth about $5 billion in the first year.
The Grattan Institute also says it could push up housing prices, but housing industry groups which represent low-income households and community housing providers have welcomed the initiative.
Emma Greenhalgh of National Shelter says a similar scheme has worked successfully in West Australia for more than a decade, helping more people into the market.
She says it will benefit people looking to re-enter the housing market, first home buyers and in particular older women who are facing housing issues as a result of separation.
According to an Anglicare nationwide survey the rental crisis persists.
It found of the nearly 46,000 homes advertised for rent, 720 (less than 2%), were affordable to a single person on the minimum wage.