Victorian premier Daniel Andrews says he is hoping to address the issue of housing affordability head on.
He has announced first home buyers in the state buying houses for under $600,000 will not have to pay stamp duty from July.
The Victorian government says the move is likely to help around 25,000 people get into the housing market.
"This can represent anywhere between a $15,000 saving and up to about $25,000 in savings. That's enough to furnish the house. That could be a year's saving. It could be even more than that. It's a really simple, common sense way in which we can support more young couples into the housing market."
House prices have been soaring in major capital cities around Australia, with Sydney and Melbourne recording the highest increases.
Data from the housing analytics company CoreLogic shows the value of property sales in Sydney has skyrocketed more than 18 per cent in the last 12 months.
Melbourne's rise was 13 per cent.
Mr Andrews also announced a one per cent tax on vacant properties, hoping to address the number of investor properties without tenants.
Some estimates have suggested as many as 80,000 homes are sitting empty in Melbourne.
New South Wales premier Gladys Berejiklian has said housing affordability is the biggest issue in her state.
And now Federal Treasurer Scott Morrison says tackling house prices will be a focus in the upcoming May budget.
"There will be a very strong focus on this in the budget. And it won't just deal with the challenges faced by first home owners. We've got to remember that over 30 per cent of Australians actually live in homes that are rented, and, when people are finding it hard to get into the housing market, that puts a lot more pressure on the rental market. Now, I'm as much concerned about someone who's on a low income struggling with their rent as I am with someone who I know wants to get into the home ownership market themselves. They're both important challenges for Australians."
At the federal level, Labor wants to target housing investors by limiting negative gearing to new housing developments.
It also wants to wind back the capital gains tax discount for investment properties.
Federal Labor MP Andrew Leigh says Mr Morrison has no plan to address house prices.
"This is a guy who's ruled out changes to negative gearing and the capital gains tax discount, which most economists say are helping to blow up the market by tilting the hand towards investors and away from first home owners."
But Liberal MP John Alexander says investor ownership is causing the rising costs.
He says, instead of looking at ways to subsidise home owners to get into the market, the government should tackle speculative investors.
"We're at a 60-year low of home ownership. The projection is that home ownership will be less than 50 per cent. Eighty four per cent of investors have only one property. You might think that's good that there's 84 per cent of investors, but it means that 16 per cent of investors own everything else. So what does that figure become when home ownership gets to under 50 per cent? I think that's scary. So you'll have a market that's dominated by speculative, opportunistic investors, rather than the stabilising effect on the market of greater levels of home ownership."
Mr Alexander says abolishing negative gearing would crash the housing market.
He argues, instead, the government should limit the amount banks can lend to housing investors.
"To me, if you get rid of negative gearing, you take away one of the foundations that creates the value of real estate, so you will crash the market. We have a problem with the laws as they are, but I think, if you look at what APRA did in restricting lending to investors to 80 per cent, that had a dramatic and immediate impact. My thinking is, if we could calibrate that figure, we could then control housing inflation driven by investors much the same as the RBA controls inflation by controlling the prime rate."
