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Home Guarantee Scheme changes could add 3-5% to prices

  • Writer: Jenny Fentino
    Jenny Fentino
  • Aug 28
  • 2 min read

Updated: Aug 29


The government has pulled the trigger early. From October, not January, first-home buyers will be able to access the 5 percent home guarantee scheme under new changes.


That means thousands of Australians can enter the market sooner, armed with smaller deposits and freed from the burden of Lenders’ Mortgage Insurance.


The timing matters. Sydney buyers can now purchase up to $1 million with just $50,000 down. Melbourne’s cap sits at $950,000, Brisbane at $1 million. The scheme lowers the entry barrier in the three cities where affordability is most stretched.


Timing is key

At the same time, the Reserve Bank is cutting rates. The cash rate has already fallen three times this year, lifting average borrowing capacity by 7-10 percent.


For many, that means an extra $50,000 to $75,000 in potential borrowing capacity. Stack that on top of the reduced deposit hurdle and the effect is powerful.


Property prices impact

Roughly 70,000 households are expected to benefit in the first year. That is not the whole market, but it is enough to shift momentum in the lower and middle tiers. Demand in Sydney’s west, Melbourne’s outer suburbs, and Brisbane’s growth corridors will feel the strongest push.


By bringing the scheme forward, the government has pulled demand into the present, accelerating the cycle and giving sellers more leverage in the spring selling season,


Flexdoc research shows that prices will rise faster than official forecasts suggest.


Flexdoc estimates point to a three to five percent increase across entry-level and mid-market segments over the next twelve months.

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