Big changes are here for Australians trying to get into the property market.
The government’s expanded First Home Buyer Scheme (also known as the Home Guarantee Scheme) has lifted income limits, raised property caps, and made it possible to buy with only a 5% deposit while avoiding Lenders Mortgage Insurance (LMI).
It is a major move that will open doors for many first-time buyers, but like any policy shift, it comes with both positives and potential risks.
What Has Changed
- No income limits, anyone can now apply.
- No cap on participant numbers, previously only a set number of people could access the scheme each year.
- Higher property caps, up to $1.5 million in Sydney and $1 million in Brisbane and Canberra, with increases across most regions.
- 5% deposit with no LMI, as the government guarantees 15% of your loan and removes the need for Lenders Mortgage Insurance.
Skipping LMI on a $1 million purchase can save around $30,000 to $35,000, which is a significant help for anyone trying to bridge the deposit gap.
The Upside
Easier entry to the market
Saving a 5% deposit is much more achievable than 20%, especially when rents and living costs are high.
More choice
With higher property caps, first-home buyers can now consider better-located homes or slightly larger properties that were out of reach under the old limits.
No LMI
Removing LMI can save buyers tens of thousands of dollars, freeing up funds for furnishings, renovations, or keeping a healthy financial buffer.
Faster path to ownership
For many, this means getting into the market sooner and benefiting from future growth instead of continuing to chase rising prices.
Flow-on effect for the economy
More first-home purchases could stimulate building activity, trades and local spending, supporting the wider economy.
The Risks and Realities
Higher debt levels
A smaller deposit means a larger loan. That results in more interest paid over time and tighter cash flow, especially if rates rise again.
Risk of negative equity
If property values fall, buyers with small deposits could find themselves owing more than their home is worth in the short term.
Potential price pressure
More eligible buyers could push prices higher. Some economists predict a modest national rise, but popular lifestyle areas are likely to feel more impact.
Affordability gap
While the scheme helps those ready to buy now, it can make it harder for those still saving if prices continue to rise.
Regional differences
The benefits will vary by area. High-demand regions like the Sunshine Coast are likely to see stronger buyer competition, while smaller towns may feel less effect.
What We Might See in the Market
- More first-home buyers entering the market sooner.
- Increased competition in the $600,000 to $1 million price range.
- Slight upward pressure on prices, particularly in lifestyle regions.
- Banks tightening lending criteria to manage higher loan-to-value ratios.
- Stronger demand for family homes and entry-level properties.
On the Sunshine Coast, we can expect to see more activity from younger buyers and families who were previously priced out, especially around Buderim, Mountain Creek and Palmwoods.
What It Means for You
If you are a first-home buyer, this could be the opportunity to finally make your move. Take the time to understand your repayments, speak with your broker, and focus on properties that hold long-term value.
If you are a homeowner or seller, you may see more buyer activity and stronger competition from motivated first-home buyers.
If you are watching the market, this policy could help restore confidence and momentum after a quieter period.
Final Thoughts
The expanded First Home Buyer Scheme is a welcome helping hand, but it is not a one-size-fits-all solution.
For the right buyer, it can make home ownership possible sooner, but it is still important to plan carefully, buy within your means and think about the long-term picture.
If you would like to understand how these changes could affect property values or buyer activity in your area, reach out to Property Today.
We are always happy to talk about what is happening in the Sunshine Coast market and how it might shape your next move.
