The Government's New 5% Deposit Scheme: 1st of October 2025

The Government's New 5% Deposit Scheme: 1st of October 2025

From 1 October 2025, the Scheme will remove limits to the number of Government guarantees available, giving all Australian first home buyers the chance to enter the market with a deposit of as little as 5% and avoid Lenders Mortgage Insurance.

The expanded Home Guarantee Scheme delivers on the Government’s election commitment to support all Australians into home ownership.

What’s changing from 1 October 2025?

No place limits: all Australian first home buyers who have saved a 5% deposit can apply.

No income caps: first home buyers with higher incomes can access the Scheme.

Higher property price caps: to help home buyers where property prices have increased.

Simpler access in regional areas: Regional First Home Buyer Guarantee will be replaced by the First Home Guarantee.

The Home Guarantee Scheme is available through over 30 Participating Lenders across Australia, including a wide range of customer-owned and regional banks, as well as major banks. Housing Australia will continue to work with lenders to increase access to the Scheme.

What does this mean for property prices? 

This will put more buyers in the marketplace. More buyers is more demand. Pressure cooker for growth.

This will push prices higher as once people can purchase more with large purchase price gaps the more they will push.

This incentive in combination with cheaper debt right now with lower interest rates will continue to pressure the marketplace.

Prices will rise from this. First home buyer's ignite and fuel the market 
Assists with affordability limitations for first home buyers.

Chapters

• 0:00 New Home Guarantee Introduction
• 0:56 Requirements and Income Caps
• 1:54 Capital City Price Caps
• 3:28 Impact on Property Market Growth
• 6:12 Time in Market and Final Advice
• 8:42 Call to Action and Closing

Transcript

Speaker 1: 0:00

the government's new home guarantee and how this is going to create a property boom. My name is Casey Taylor, I'm the host of the Tailored Property Wealth Podcast and in today's episode, we are going to be talking about the new home guarantee, what the new requirements are and also what it's going to mean for the property market. Let's get straight into it today and discuss the home guarantee, which is now going to be live from the 1st of October 2025, and it's actually brought that forward from an expected date of January. Now, for this scheme, it's actually going to mean there is going to be no place limits, which is really positive for a lot of people where there was a cap for that, and now there's no cap whatsoever. All right, now, what are the requirements of that? You essentially the government guarantees 15%. You only have to go in with a 5% deposit. You don't have to pay lender's mortgage insurance, so it is a massive play, a massive saving there. For that. Now there's no income caps as well. Prior, there was an income cap on an individual I believe it was 120K and for couples around the 200K mark, but now it is open to anyone, no matter what the income level is, and that is a positive, because there's a lot of people out there that are on high incomes but they don't have the savings there which this is going to help support there, which this is going to to help support.

Speaker 1: 1:49

Now the next one, which is a really important one, I believe, to take a look at, which is the market caps based on purchase price. So I'm going to run through the capital city caps and what they're increasing from and to, because that is going to be key, with a couple of points that we talk about. So Sydney is currently at 900,000 and will increase to 1.5 mil. Melbourne, sitting at 800,000 and increasing to 950,000. Brisbane, 700,000, increasing to 1 million. Perth, 600,000, increasing to 850,000. Adelaide, increasing from 600,000 to 900,000,. Hobart, 600,000 to 700,000, canberra, 750,000 to 1 million, and then Darwin no one gives a fuck about Darwin. It is 600,000 now and it will not change and is going to stay at the 600,000, okay. So that's something really important to understand because there is a lot of demand in those cap levels. A great example is Brisbane, in that 700 and under range. It's a really hot market because there is a lot of first home buyers transacting in that market, but now, with that new cap, they're going to be able to go higher and it's going to continue to put push pressure on those new prices as we go forward. So it's it is a really key one to take a look at. And those caps are based on affordability. In those capital cities right Sydney, it's one of the most unaffordable locations median price is one of the highest. So that cap naturally is increasing and you can see that kind of translate with some of those other capital cities and you can see that kind of translate with some of those other capital cities. Now what does this mean for property prices? This is going to encourage more people to enter the market. It's going to encourage people to enter the market sooner than they could have Now. That means there's going to be more buyers. More buyers in the marketplace means more demand.

Speaker 1: 4:06

Increased demand is the pressure cooker for growth that I talk about. It creates scarcity. We fundamentally still have a supply and demand issue in this country. We have the government setting a 1.2 mil target over the next five years that they are not keeping up with. To hit that target, they understand we need to add more supply, but we're simply not keeping up. So we've got demand increasing but we've got supply levels not keeping up with where we're aiming for, and that is going to be a pressure cooker for growth. If you understand that and you take action now, you will reap the rewards. Not only do we have the demand increasing on that front, but we have interest rates that we've seen reduce three times this year and we still probably expect to see another couple of cuts.

Speaker 1: 4:58

And let's be conservative and say over the next six months. With those rate reductions, that is serviceability improving for people. Their cash flow is improving and that means some people who may not have been able to purchase can now purchase and it means some people that could have purchased but they're sitting tight waiting for their cash flow to improve and their holding cost to improve. They're now going to go out and take action. So it is going to see demand very strong and some areas are already very strong. We've got median days under 20 in some areas are already very strong. We've got median days under 20 in some areas. Some areas we're focusing on have a median days of 30 and we expect to see that reduce over the next 12 months. So some of those areas where you can transact and it's not too hot now, in the next 12 months it's going to be hot. So if you can get in now, before the herd flood back in, you will be setting yourself up and then you're going to get that flow and increase of capital growth. All right, that is super, super important to understand with these changes.

Speaker 1: 6:12

Okay, first home buyers they ignite and fuel a marketplace. It's not just the first home buyers just benefiting, right, because what happens on the back of that is it heats up the market overall. Now it can be a positive, it can be a negative. We released something on our Instagram this week and there's so many negative comments talking about this. You can't fucking win. No matter what you do, the government does one thing people are going to be happy, people are going to be unhappy. But for first home buyers who are struggling to get in, this is a positive. But, yes, prices are going to increase off the back of this.

Speaker 1: 6:51

This is why getting in as soon as possible, not sitting on the fence waiting years and complaining prices are too high you must get in because the sooner you get in, the better, before prices increase. If prices increase another $100,000 over a 12-18 month period, you now are paying more for that same asset, but you're borrowing more for that same asset and that kills your cash flow over 30 years because you have to pay off that additional debt, not to mention if capital growth is outpacing rental income growth. Your yields are actually dropping over time. So people are saying I'm gonna wait for the interest rate to improve, but it doesn't actually fucking matter because your yield that you could have got for 4.5% now in 12 months time is 4.2 4.1.

Speaker 1: 7:41

So you have to understand the marketplace and you have to get in and you have to transact. Time in the market is key. You cannot time a market. It's never going to be the perfect time to purchase. You have to get in Now that affordability piece based on those caps in those individual cities, you will see those areas really heat up.

Speaker 1: 8:10

That's it for today. It's really just understanding the new changes in this scheme and what it's going to mean for property prices. Depending how you look whether you're a positive or negative person as to what you make of it, there is definitely positives and, yes, arguably there are some negatives. But getting into the marketplace and riding time it's going to get you that capital growth which is then allowing you to go into more property if your goal is to build a property portfolio If you don't know where to invest. You don't know how to invest, but you want to get in and you want to make sure that decision is educated and you're mitigating your risk. Reach out to us. We're happy to have a chat and see if we could potentially help you purchase high quality, high performing investment property. We have a select number of spots each month and we want to work with clients who we have the same values at and we really work together well as a team. Reach out and we can have a chat. Thank you for listening and we'll see you on the next one.