The property landscape just shifted dramatically. First-home buyers can now enter the market with just 5% down and skip Lenders Mortgage Insurance entirely under the expanded First Home Guarantee scheme.
What’s Actually Changed?
The new rules are generous:
- No income caps for first-home buyers
- Unlimited spots available
- Significantly higher property price caps
The price caps have jumped substantially – Sydney increased from $900K to $1.5M, Melbourne/Geelong rose to $950K, and Brisbane/Gold Coast/Sunshine Coast reached $1M.
While a 5% deposit opens doors, banks still need to approve loan serviceability. Buyers need steady income, good credit, and the ability to make monthly repayments on potentially large mortgages.
What the Scheme Doesn’t Cover (Important!)
Here’s what many first-home buyers don’t realize: the 5% deposit scheme doesn’t waive stamp duty. This is a separate cost that can add tens of thousands to your property purchase.
However, there’s good news – you might still get stamp duty relief through other programs:
- NSW Example: First-home buyers can skip stamp duty entirely on existing homes under $800,000
- Your State: Each state has different stamp duty rules and thresholds for first-home buyers
- Action Required: You need to check your specific state’s stamp duty concessions separately from this deposit scheme
Think of it this way: the 5% deposit scheme helps with your upfront cash, but stamp duty relief helps with government taxes – they’re two different benefits that work together.
Where the Action Will Be
Here’s where the scheme will likely have the biggest impact:
| Market Type | Price Cap | Median Price | Impact Level |
| Sydney Growth Corridors | $1.5M | $800K – $1.2M | High |
| Melbourne Outer Suburbs | $950K | $650K – $850K | High |
| Brisbane/Gold Coast | $1M | $700K – $900K | High |
| Regional Affordable | $500K – $700K | $400K – $600K | Low |
Market Impact
More government-backed buyers means increased competition, but the actual impact depends on:
- Interest rate movements – Higher rates may offset the deposit benefit
- Local housing supply – Areas with new developments may see less pressure
- Employment conditions – Strong job markets will amplify the effect
- Current buyer activity – The biggest impact will be where first-home buyers were already competing
Industry experts expect this could be “one of the most ambitious housing affordability measures in years,” potentially increasing property prices in targeted areas.
Smart Investor Strategy
This policy creates new market dynamics that require strategic thinking:
Market Selection: Choose areas based on your investment goals, not just where first-home buyer activity is increasing.
Competition Awareness: Understand that popular first-home buyer suburbs may see intensified bidding, rental pressue.
Long-term Focus: Remember that policy-driven market movements are just one factor in property investment success.
The Bottom Line
The expanded scheme reshapes competition in specific market segments, but smart investment principles remain unchanged: buy well, hold long, and focus on fundamentals over headlines.
Navigate the New Landscape with Expert Guidance
Understanding policy changes is one thing and knowing how to act on them is another.
At Buyerbuds, we help both property investors and first-home buyers succeed in today’s competitive market. We were recently recognized as Innovator of the Year – Buyer’s Agent (PPOR) at REB Innovation Awards 2025, reflecting our commitment to delivering cutting-edge solutions for property buyers.
For Property Investors: We help you make informed decisions in changing markets. Our buyer’s agents understand local dynamics, policy impacts, and can guide you through market complexities, whether you’re looking to identify opportunities, avoid overly competitive markets, or build a portfolio that weathers policy changes.
For First-Home Buyers: The 5% deposit scheme opens new doors, but navigating the property market can still be overwhelming. We help first-home buyers:
- Find properties within the new price caps that offer genuine value
- Navigate competitive bidding in popular areas
- Understand loan serviceability requirements beyond just the deposit
- Learn about stamp duty concessions you might qualify for in your state
- Make strategic choices that suit their lifestyle and budget
- Avoid common first-time buyer mistakes
Ready to discuss your goals?
Whether you’re an experienced investor or taking your first step onto the property ladder, we provide expert guidance tailored to your specific situation.
Contact Buyerbud today for a consultation and discover how we can help you navigate this new market landscape with confidence.
