Only way to increase affordability is too bring the price down with an oversupply of housing which is currently the case. Wage growth over next few years will not help affordability much because prices have risen well above historical rates due to low interest rates. ( ie bubble )
As for interest only loans , only people i know who have taken out these type of loans are speculators. If labor party gets rid of tax deduction on interest then more speculators will sell out imo.
"interest-only loans can be useful for property investors who can claim the interest as a tax deduction, first home buyers trying to make their first year of loan payments more affordable after the initial upfront expenses of buying, or buyers who only plan on holding onto the property for a few years before selling it."
