Fast-tracked Home Guarantee overhaul to nearly double markets available to first-home buyers from Oct. 1

The federal government's accelerated changes to the Home Guarantee Scheme will nearly double the number of Australian housing markets in which first-home buyers can use a five per cent deposit from Oct. 1, new analysis shows.

Property analytics firm Cotality said Wednesday that under the scheme's previous price caps about one-third of the almost 5,000 house and unit markets it analysed nationally had medians below the respective limits. Under the revised caps and the removal of income and place restrictions, that portion rises to 63 per cent overall, including 51 per cent of house markets and almost 94 per cent of unit markets.

The Home Guarantee Scheme allows eligible first-home buyers to avoid lenders mortgage insurance when purchasing with a five per cent deposit. The government has moved the rollout forward from its original January 2026 start date to Oct. 1 and increased regional price caps across most jurisdictions, while removing previous income and geographic limits.

Cotality economist Kaytlin Ezzy said the revised settings would give first-home buyers greater choice and help those without access to parental assistance. "Previously, to qualify for the scheme, first-home buyers were largely restricted to more affordable housing options, including units and houses in outer mortgage belts and regional markets," she said. "The new price caps represent a substantial increase for most regions and are designed to be more in line with each region's median house values."

The scale of the changes varies by region. In Perth, formerly only two suburbs — Medina and Mandurah, with median house values just under the old $600,000 cap — qualified for the scheme; the cap for Perth houses rises to $850,000 next month. Sydney and the Illawarra, Newcastle and Lake Macquarie regions will see caps increase by $600,000 to $1.5 million. Southeast Queensland and Adelaide caps have been raised by $300,000 to $1 million and $900,000 respectively.

The Cotality analysis highlighted striking shifts at the local level. Adelaide now has 130 suburbs with house medians below the new caps, or 46.6 per cent of suburbs — up from just eight suburbs, or 2.9 per cent, under the old limits. Brisbane experienced the largest proportional increase for units: 97.5 per cent of suburbs (153) will qualify compared with 36.9 per cent (58) previously.

Housing industry sources said the combination of policy and current market conditions could accelerate activity. Rethink Residential director Mina O'Neill described a "perfect storm" of falling interest rates, a surge in listings and the expanded scheme that could create both opportunity and competition. "This spring we're seeing a unique convergence of falling rates, more stock, and powerful policy incentives," she said. "It's creating opportunities, but also fierce competition, and buyers who move early are in the strongest position to benefit before the market heats up further."

O'Neill also warned that some wealthy families may exploit the scheme by providing deposits in their children's names, a practice she said could widen inequality in access to housing. Cotality's Ezzy acknowledged the scheme is likely to exert upward pressure on home values, saying the policy "will undoubtedly put some upward pressure on values, it will help create a more equitable starting point and provide more options for those looking to get on the property ladder."

Not all responses were supportive. Shadow Housing Minister Senator Andrew Bragg criticised the absence of means testing, saying on social media that "children of billionaires can now use the government's mortgage insurance scheme." He told radio listeners it was "pretty crazy" that wealthier Australians could access the program without additional restrictions.

Industry groups urged complementary measures to boost housing supply. Real Estate Institute of Australia president Leanne Pilkington said the accelerated rollout would make it easier for more Australians to enter the market but that support for first-home buyers must be matched by supply-side policies. The institute noted the government's commitment to build up to 100,000 homes exclusively for first-home buyers and called for wider policies to address the housing shortage.

The change comes as the combined value of Australian residential real estate rose to $11.7 trillion at the end of August, an increase of 1.8 per cent over the quarter. Policymakers and market participants will be watching price and demand movements closely after the Oct. 1 start date, while discussions continue about how to balance immediate buyer support with measures to expand housing supply and limit longer-term price impacts.