Former deputy PM Michael McCormack says Labor has created 'disastrous' housing situation as Albanese government's expanded five per cent deposit scheme goes live

Former deputy prime minister Michael McCormack has lashed Labor for creating a “whirlpool of disaster” through its handling of the housing crisis.

The Albanese government’s five per cent deposit scheme for first-home buyers kicked in on Wednesday, dropping deposits required under the Home Buyer Scheme from 20 per cent.

Speaking to Sky News Australia, Mr McCormack said the situation was so bad that even the Prime Minister had admitted the scheme was going to “push up prices”.

Prime Minister Anthony Albanese conceded there would be a "minimal impact" to property prices with the launch of the first home buyers' deposit scheme.

"It will have a minimal impact. There will be a slight increase in prices. But already 185,000 Australians have benefited from this scheme with minimal impact on p