Starting tomorrow, Wednesday, October 1, the federal government’s new First Home Buyer Scheme will officially begin, allowing Australians to enter the housing market with just a 5% deposit. The remaining portion will be guaranteed by the government, fulfilling a key Labor election promise.
The expanded scheme removes previous income and participant caps, aiming to give all first home buyers a fair chance to own property. Price caps will also rise in line with market averages, increasing access to a broader range of homes.
According to government estimates, buyers using the program could save about $1.5 billion in mortgage insurance costs in its first year.
However, property experts are warning of side effects on an already overheated market. Melinda Jennison, president of the Real Estate Buyers Agents Association of Australia (REBAA), said property prices had already jumped as buyers rushed to purchase before the scheme’s launch.
“Properties that were selling for $750,000 last month are now closer to $800,000,” Jennison said. “Many buyers are panicking and making rushed decisions, sometimes even buying sight unseen.”
She cautioned that unless housing supply increases, demand from the scheme could push prices even higher. “What’s $800,000 today could soon become $900,000,” she said.
Experts urge first home buyers to remain calm, stick to their budgets, and seek advice from professional buyers’ agents to avoid overpaying due to fear of missing out.
