Announced by Labor leader Anthony Albanese on Friday, the new policy detail comes as the major parties grapple with voter concerns about housing affordability, exorbitant fuel prices and other rising cost of living pressures.

It also comes as the Property Council of Australia found more than 70 per cent of voters were fearful younger Australians would not be able to buy a house due to rising prices outstripping the ability to gain a mortgage deposit.

"It's regional Australia where we've seen prices skyrocket more than anywhere else and its regional Aussies who need help today more than anybody else," Labor's housing spokesman Jason Clare told Australian Community Media, publishers of this newspaper.

Two Mudgee real estate agents address the local housing crisis

"It's right across regional Australia, whether they're big regional centres or small country towns. We're seeing prices jump by 26 per cent in Orange, 29 per cent in Bathurst, 30 per cent in Burnie, 32 per cent in Ballarat and almost 29 per cent in Bendigo. On the Central Coast they have gone through the roof in some places up to 47 per cent and on the South Coast of NSW it's just the same."

Slated to start in January 2023 and cost $12.1 million in the first year, the ALP's regional scheme would run in addition to the current national First Home Loan Deposit Scheme which is fully subscribed at 10,000 places and operates on a first-in, first-served basis. It would effectively triple the number of people in the regions getting first home buyer support.

"We support [the current] scheme, but it's not big enough," Mr Clare said.

"Over the course of the last few years the breakup has been largely two-thirds to the cities, one-third to the regions. Labor's regional first-time buyer scheme is reserved just for people who live in the regions and to access the scheme you'll have to have lived in the region for the last 12 months."

Under the scheme, first home buyers can buy property with a deposit of just 5 per cent instead of the usual standard of around 20 per cent. The government would guarantee the additional amount needed to reach the 20 per cent threshold, thus allowing borrowers to avoid paying thousands of dollars in lender's mortgage insurance.

With the government providing a guarantee of up to 15 per cent of the value of the property purchased, that's a saving of up to $32,000 for a property in the Illawarra, Central Coast and Hunter regions.

The big question is are there houses available for first home buyers under the scheme? Supply is widely acknowledged as one of the most pressing housing issues. There are local price caps for properties which rise to $800,000 for the houses in the Illawarra, Central Coast and Hunter regions, come in at $400,000 in Tasmania and $500,000 for regional Victorian houses, although Geelong is listed at $700,000.

In recognition of rising house prices, Labor is pledging to review and update the scheme's price caps every six months, rather than yearly, under the current scheme.

"If the price caps need to be adjusted and raised to make sure that they can get their first home then we'll do it," Mr Clare said.

And if house prices fall as touted by the major banks what would happen to the first home buyers? Could they be in a worse financial position? An expected 2023 price reversal in the housing market of more than 10 per cent could see Australians using lending schemes lose value in their homes.

"What's important here whether people are accessing this scheme or not is that they can afford to get the loan and repay it in circumstances where interest rates return to normal levels," Mr Clare said.

"And interest rates won't stay at emergency levels forever. That's why the rules that have been put in place by APRA to make sure that the banks are only lending to people who can afford to repay the loan at current interest rates but also when interest rates return to normal levels are so important."

The government body that runs the current scheme, the National Housing Finance and Investment Corporation, would set the boundaries for capital cities and for larger and smaller regions.

To be eligible, the first home buyer would also have to be over 18, live in the house purchased and have a taxable income of up to $125,000 per year for singles and $200,000 a year for couples.

The ALP last year released its $10 billion pledge for a Housing Australia Future Fund to build 30,000 low-cost houses. Mr Clare hinted the ALP would have further housing policies to help people to buy a home in the suburbs.

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