How the First Home Buyer Scheme Changes Are Affecting the Market
- Aly Walsh
- Oct 10
- 3 min read
As of 1 October 2025, major updates to the federal First Home Buyer Guarantee (also known as the Home Guarantee Scheme) have officially come into effect. The government has lifted many of the restrictions that previously limited who could apply and where they could buy — all with the goal of helping more Australians purchase their first home sooner.
But now that the changes are in place, what are we actually seeing in the market?
What’s Changed
Under the new rules:
Unlimited places – There’s no longer a cap on the number of applicants.
Higher property price caps – Buyers can purchase in more suburbs and at higher price points.
No income limits – Eligibility is no longer restricted by salary.
Lower deposit requirements – Buyers can now purchase with as little as a 5% deposit and avoid costly Lenders Mortgage Insurance (LMI).
These updates remove some of the biggest hurdles first home buyers have faced, allowing many renters and younger buyers to enter the market years earlier than before.
Early Benefits
The immediate effect has been an uptick in first home buyer interest and enquiry levels. With the deposit and income barriers gone, more people are actively looking — and some are already purchasing. Avoiding LMI is saving buyers tens of thousands of dollars upfront, while the raised price caps have opened up new suburbs that were previously out of reach.
Entry-level suburbs and regional centres are seeing stronger competition, encouraging new housing supply and more movement up the property ladder as first home buyers purchase from existing owners.
Emerging Challenges
However, with more buyers in the market, competition has intensified. Increased demand without a matching rise in supply is already pushing up prices in some entry-level suburbs. Areas that now fall within the new price caps — especially near transport and employment hubs — are seeing renewed heat.
Affordability remains a concern. While smaller deposits make buying easier, ongoing costs like loan repayments, rates and maintenance still need to be carefully managed amid higher interest rates and cost-of-living pressures.
Market Outlook
Over the coming months, the overall impact will depend on how quickly housing supply responds. If new developments keep pace with the rising demand, price growth could remain moderate. But if supply remains constrained — as has been the case across much of Australia — prices may accelerate faster than expected.
Investors should keep an eye on this shift too. Increased first home buyer activity can influence rental supply, drive changes in demand patterns, and create fresh opportunities in suburbs that are gaining new attention.
Tips for First Home Buyers
If you’re thinking of using the new scheme:
1. Get pre-approval early so you can move fast when the right property comes along.
2. Check the updated price caps for your state and region to understand your buying power.
3. Budget for the full cost of ownership — not just the deposit.
4. Explore off-market or lightly renovated properties for better long-term value.
These October changes mark one of the biggest shifts in first home buyer policy in years. They’re already helping thousands of Australians take their first step into the market — but they’re also reshaping how properties are priced and sold across key suburbs.
Whether you’re a first home buyer, investor, or current homeowner, understanding how these changes interact with your goals is essential.
If you’d like tailored advice or help navigating this new market landscape, now is the perfect time to reach out to a buyer’s agent who can guide you through your next move.
📞 0411 771 181
*** Disclaimer: The information provided in this blog is intended for general informational purposes only. While we have made every effort to ensure the accuracy and reliability of the content, it should not be considered as personalised or professional advice. The homebuying process can vary based on individual circumstances, property types, and location-specific regulations.
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