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Surge in First-Home Buyer Activity Following Expansion of 5% Deposit Scheme

Government Policy Changes Drive Increased Demand in Affordable Housing Markets

Surge in First-Home Buyer Activity Following Expansion of 5% Deposit Scheme?w=400

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The Australian Government's recent expansion of the 5% deposit scheme has catalyzed a notable surge in first-home buyer activity, particularly within the affordable housing segment.
This policy adjustment aims to make homeownership more accessible by allowing eligible buyers to enter the market with a minimal deposit, thereby reducing the financial barriers traditionally associated with purchasing a home.

Since the scheme's expansion, there has been a significant uptick in first-home buyer loans. Data indicates that the 12-month rolling count of loans lodged by first-home buyers rose steadily from mid-2023 to mid-2024, increasing by 14%. This trend reflects a growing confidence among new entrants to the property market, buoyed by the reduced deposit requirements and the removal of income caps.

The policy changes have also led to a shift in market dynamics. The affordable end of the housing market has experienced above-average growth, with house prices in the bottom quartile jumping 34% to reach $711,000 nationally since the start of 2023. This outpaces the median and upper quartile growth rates, indicating a heightened demand for more affordable properties.

For prospective first-home buyers, this development presents both opportunities and challenges. The ability to purchase a home with a smaller deposit lowers the initial financial hurdle, making homeownership more attainable. However, the increased demand in the affordable housing segment has also led to heightened competition and rising prices, which could offset some of the benefits of the scheme.

To navigate this evolving landscape, first-home buyers should consider the following strategies:

  • **Thorough Market Research**: Stay informed about property trends in desired areas to identify opportunities and make informed decisions.
  • **Financial Preparedness**: Ensure that personal finances are in order, including securing pre-approval for loans and understanding the full costs associated with purchasing a home.
  • **Professional Guidance**: Engage with real estate professionals and financial advisors to gain insights and assistance throughout the buying process.

In conclusion, the expansion of the 5% deposit scheme has significantly influenced the Australian housing market, particularly for first-home buyers. While it offers a pathway to homeownership with reduced initial costs, the resultant market dynamics necessitate careful planning and strategic decision-making to fully capitalize on the opportunities presented.

Published:Wednesday, 18th Feb 2026
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

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