All first home buyers in Australia will soon have the opportunity to enter the property market with a lower deposit, as the government fast-tracks a federal scheme. The initiative, allowing prospective buyers to secure a property with a deposit as low as five per cent, will commence in October 2025, three months ahead of its originally scheduled launch in January 2026.
This scheme marks a significant expansion, now offering access to all first home buyers after previous versions were limited by annual participant caps. Under the program, the government acts as a guarantor, covering the remaining 15 per cent of the deposit, which enables buyers to avoid expensive lenders mortgage insurance.
Prime Minister Anthony Albanese emphasized that the earlier start date aims to make home ownership more attainable. “We want to help young people and first home buyers achieve the dream of home ownership sooner,” Albanese stated. “Bringing the start date of our five per cent deposit scheme will do just that, getting more Australians into their home quicker, while saving money along the way.”
Increased Caps and Accessibility
As part of the scheme’s rollout, price caps for eligible homes have been raised across nearly all jurisdictions. For instance, a first home buyer purchasing a property at the national median price of $844,000 will only need a deposit of $42,200. In Sydney, where property prices are significantly higher, a buyer looking at the maximum property value of $1.5 million would need a deposit of $75,000.
The Australian Government anticipates that approximately 70,000 individuals will utilize the home guarantee scheme in its first year of expanded access, which is 20,000 more than the current cap. Housing Minister Clare O’Neil remarked that this initiative is designed to make access to home ownership more equitable. “The Albanese Labor government is stepping up to level the playing field and back a new generation of first home buyers into the housing market,” O’Neil said. “It’s just not right that an entire generation of young Australians have been locked out of the housing market, saving for decades while paying off someone else’s mortgage.”
Supporting Construction and Housing Development
The earlier implementation of this scheme coincides with a pause on upcoming changes to the national construction code, designed to facilitate quicker home building. These changes will remain on hold until 2029, with the exception of safety standards aimed at simplifying processes for construction workers. This decision follows a productivity roundtable held by the federal government, which also expedited environmental approvals for over 26,000 homes.
The government’s concerted effort to enhance home ownership prospects for first-time buyers highlights a commitment to addressing housing affordability in Australia. With the combination of a lower deposit requirement and increased access to the guarantee scheme, many prospective buyers may find themselves closer to achieving their goal of home ownership.
