Grattan Institute supports the proposal to establish a federal Help to Buy scheme, which would help more low-income Australians to secure home ownership, including many older Australians approaching retirement.

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But the income thresholds for eligibility for the scheme should be tightened to make sure that the limited number of places are made available solely to those who most need the scheme.

As proposed, with a limit of 10,000 places each year, the scheme is unlikely to materially push up house prices. But a substantially expanded scheme would materially boost demand for housing, and therefore also house prices, and so could prove counterproductive.