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A $500 million plan to help first home buyers into the market did not go through cabinet and has not been modelled for its impact on property prices, as experts warn the policy will fail to meet its objectives. The first some members of cabinet heard about the plan, which will see the government effectively guarantee a portion of loans taken out by first time buyers, was when Prime Minister Scott Morrison announced it during the Coalition's election campaign launch on Sunday. Mr Morrison used the surprise promise to launch the final week of his campaign on Monday, visiting building sites in the western Sydney seat of Lindsay and the Perth seat of Cowan - both held by the Labor. While Treasurer Josh Frydenberg on Monday conceded the program would lift the Commonwealth interest bill, he refused to confirm whether the plan had been properly modelled. He said the Coalition had consulted people in the property industry, arguing the aim was to help lift the number of people aged between 25 and 34 getting a home loan. "There has been a fall in the number of people who are first home buyers in that particular age bracket and we are trying to stem that development by enabling younger people to get a foot in the door," he told the ABC. Mr Morrison opened the door on Monday evening to expand his policy, saying the Coalition could allow extra money to be used to guarantee loans if demand was greater than expected. The scheme is to be demand-led with no quotas or restrictions, enabling major centres such as Sydney and Melbourne where housing prices are highest to dominate usage. The Coalition says it will work with the National Housing Finance and Investment Corporation to determine "appropriate default rates" that may affect the scheme. Restrictions will be put in place to ensure first home buyers remain owner-occupiers of their properties rather than rent them out. Labor promised to match the Coalition's policy within two hours of it being announced and, like the Coalition, did not discuss the move within the full shadow cabinet. Opposition Leader Bill Shorten said Labor would not oppose a proposal just because it had come from the Coalition, adding that the overall plan was small in its potential impact. "They've proposed a modest program, a restricted program which may potentially assist 10,000 people. We're not in the business of bagging every idea just because someone else has an idea, but if you want to tackle housing affordability it's only part of a much bigger picture," he said. The policy is capped to 10,000 people a year. More than 100,000 first time buyers have taken out mortgages over the past 12 months. The Australian Bureau of Statistics reported on Monday the proportion of loans taken out by first time buyers was at a six-year high, with more than 8411 in March alone. Of that, 2,560 were in Victoria and 2,166 in NSW. Eray Saban, who hopes to buy his first home next year, said the policy will alleviate the need for young people to rely on others for help, although he is also now worried prices will rise as more first-home buyers vie for properties. "On an average wage, it's pretty tough and it has been challenging thus far," the 26-year-old event manager said. "I think at the end of the day, it's a small dent in the pocket of a government but a great help for people like me wanting to enter the property market." CoreLogic head of research Cameron Kusher argued the policy undermined the government's own policy of tighter lending standards because it sought to reduce the deposit needed by a first time buyer. He said the policy would also only likely benefit those who were close to achieving a 20 per cent deposit as those struggling to save would also fail to meet other lending requirements such as being able to afford a sharp lift in interest rates. "This looks like it will help those who would probably almost have a deposit. But it probably won't help those who are locked out of the market for other reasons even with the government making up most of their deposit," he said.

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