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70k first home buyers set to flood the market from October
Property demand is set to soar with 70,000 first home buyers expected to hit the market from 1 October, under the accelerated government’s First Home Guarantee scheme.
The government has announced that the planned expansion of the First Home Guarantee has been brought forward three months from its originally scheduled start in the new year.
The expanded scheme will now begin from 1 October and is removing the cap on income eligibility, as well as the number of places in the scheme, and allows first home buyers to enter the market with as little as a 5 per cent deposit.
The government will then act as the guarantor for 15 per cent of the deposit of the loan, which will see first home buyers avoid lender’s mortgage insurance, reducing upfront costs and making the prospect of buying a home a more realistic one for many.
The property price caps are also being raised in varying amounts depending on location, with property worth as much as $1.5 million in Sydney, and $1 million in Brisbane and Canberra now becoming eligible under the scheme’s revised limits.
While previously the scheme capped out at 50,000 participants, the Treasury estimates that the adjustments to the scheme will see an extra 20,000 guarantees will be issued in the first year of the scheme being uncapped.
The Treasury’s modelling suggests that this increased participation in the market could see property prices rise by 0.5 per cent over six years as more look to purchase their first property.
The Property Council of Australia chief executive, Mike Zorbas, welcomed the fast-tracking of the scheme as a way to support first home buyers entering the housing market.
“The average age of first home buyers in our capital cities is approaching 40 and we must pull every available lever to help them into a home.”
Real Estate Institute of Australia president, Leanne Pilkington, described the accelerated rollout as a timely and practical response to affordability pressures.
“The removal of caps on income and places, along with increased property price thresholds, brings the scheme more in line with current market conditions and ensures broader access for aspiring home buyers across Australia,” Pilkington said.
“This is a significant and practical step towards addressing the affordability challenge.
“While support for first home buyers is vital, it must be complemented by supply-side measures to address the housing shortage.”
“Policies that boost supply and provide targeted support for entry into the housing market are essential,” Pilkington concluded.
Zorbas echoed Pilkington’s sentiment, stating that while the changes are a step in the right direction, maintaining balance between the demand-side support and the supply-side issues is vital.
“That said, and I cannot emphasise strongly enough, scheme design will need to be carefully reviewed on a regular basis from 1 July 2026 to ensure key housing markets do not overheat,” Zorbas said.
