First Homebuyer Scheme Could Push Prices Higher Than Government Forecasts

Australia’s housing market may heat up faster than the federal government expects, with analysts warning that its expanded First Homebuyer Guarantee could drive prices higher especially in the early years.

The scheme, which starts in October, lets first-time buyers purchase a home with just a 5% deposit and skip costly lenders mortgage insurance. Housing Minister Clare O’Neil says it’s about helping people build equity sooner, rather than spending years paying rent.

Treasury modelling suggests the policy will lift prices by about 0.5% over six years. But some property experts believe the real impact will be greater, as easier entry to the market fuels competition for homes.

While the move could help thousands of Australians into ownership sooner, it also risks adding extra heat to an already tight housing market a trade-off that’s sparking debate among economists, buyers, and policymakers alike.