Crossbenchers David Pocock, Jacqui Lambie call for increases to Housing Australia Future Fund

It is understood Housing Minister Julie Collins has been meeting with Senator Pocock, Tasmanian senator Jacqui Lambie, independent senator Lidia Thorpe and the Greens as the government seeks to build the support it needs to pass legislation and establish the fund.

Senator Pocock said he and other crossbenchers supported the policy but the funding proposed by the government fell well short of what was needed.

Under the government's plan, $10 billion invested by the fund will generate $500 million a year to be used to finance the provision of social and affordable housing.

Senator Pocock said the government's proposal was "a good start" but needed to be much more ambitious if it was to make a dent in the housing shortfall.

READ MORE:

He told ABC radio in the ACT alone, there were 3100 people on the social housing wait list, but under the government's fund the territory woold receive, at best, 540 homes.

"Given the scale of need for social and affordable houses across the country, $500 million a year is not going to cut it," Senator Pocock said.

"It's great to have a government that wants to address this, but let's have policy is up to the task."

Senator Lambie echoed his concerns, warning under the government's plan only about $80,000 would be contributed to the cost of each new home and "nobody gets a house built for that amount of money".

The Greens have called for the government to scrap the plan to establish an investment fund altogether and instead use the money to directly purchase housing.

Greens MP Max Chandler-Mather said there was a national shortage of 640,000 social and affordable homes which would increase by 75,000 in the next five years, while the proposed fund would deliver just 30,000.

"That's not a plan to tackle the housing crisis. It's a disaster," he said, adding the Greens should refuse to pass the government's legislation until it agrees to invest the money directly in housing.

Minister Collins was unavailable for comment but the government appears hopeful it can get the support it needs to have its legislation passed.

"Look, we support the bill, but what we'd like to see is the bill better. That's what we want to see. We're still in negotiations with that. The government of the day has been very open, we're still speaking with them on a daily basis," Senator Lambie said.

Senator Pocock was less upbeat.

"We are continuing to talk to them. As yet it has not been that positive but really hoping that will change," he said.

The bill is currently being considered by a Senate committee, which is due to report on Wednesday.

The negotiations over the legislation comes as research was released showing it was "no longer feasible" for many young adults to save up enough for a home deposit.

The research by the Australian Housing and Urban Research Institute found almost three-quarters of renters aged between 25 and 34 years had just $5000 in savings - far less than what would be needed to put a deposit on a home.

According to the study, high house prices and rapidly rising living costs meant that even focusing on essentials and minimising discretionary spending was not enough for most to accumulate the savings they need, with 40 per cent expecting to rely on their parents to help them get a toehold in the housing market.

Analysis by Commonwealth Bank shows the share of household disposable income required to service the mortgage on a newly purchased median home is back at levels not seen since 2008.

"According to our analysis, repayments in Sydney and Melbourne are at record highs for a household entering the market," CBA economists said.