Home Guarantee Scheme - Changes

A charming suburban house with a neatly trimmed hedge and modern gate lines the sunlit footpath.

1. What are the key changes to the First Home Guarantee from October 1, 2025?

Australia’s expanded Home Guarantee Scheme (formerly known as the First Home Guarantee) is set to launch significantly sooner with these major upgrades:

• Launch Date Accelerated: Moves forward to 1 October 2025 instead of the initially projected January 2026.

• Unlimited Places: No annual cap, any eligible first home buyer with a 5% deposit can access the scheme.

• No Income Caps: Eligibility no longer restricted by personal or household income thresholds.

• Higher Property Price Caps: Caps are raised across the board to reflect current market values:

  • NSW: capital/regional centers up to $1.5 million; other areas to $800k

  • VIC: up to $950k in metro; $650k elsewhere

  • QLD: metro cap at $1m; others to $700k

  • WA: metro up to $850k; others $600k

  • SA: metro $900k; others $500k

  • TAS: metro $700k; others $550k

  • ACT: up to $1m

  • NT: unchanged at $600k

• Simplified Regional Access: The Regional First Home Buyer Guarantee is being folded into the main First Home Guarantee, streamlining the process.

  
  

Bottom Line for Buyers: From 1 October 2025, any first home buyer with a 5% deposit can access this scheme no quotas, no income limits, and broader property choices.

2. How could this impact property demand and prices?

• Spike in Demand: With such broad eligibility and significantly lower upfront costs (saving thousands in LMI), pent up demand is likely to surge especially in sub $1 million markets.

• Price Inflation Risk: Analysts in The Australian warn of an 8–15% price uplift in early 2026 in popular first home buyer areas, as delayed purchases flood the market once the scheme kicks in.

• Savings on LMI: According to the Prime Minister the scheme is expected to save first-home buyers about $1.5 billion in Lenders Mortgage Insurance in the first year.

  
  

3. Which areas are most likely to be affected?

• Major Metro Areas & Regional Centers

  • Sydney: cap climbs to $1.5 million

  • Melbourne: up to $950k

  • Brisbane: up to $1 million

  • Regional Cities: Geelong, Illawarra, Newcastle, Lake Macquarie, Gold Coast, and Sunshine Coast now qualify under the same structure, simplifying access.

• Hot Sub-$1 Million Segments: Towns and suburbs just under the new caps will attract more interest, reflecting both price sensitivity and affordability goals.

  
  

4. What should savvy investors or aspiring buyers consider before October 2025?

Timing Is Key

• Buy Now or Soon: Purchasing prior to October could avoid the expected price surge once the scheme starts.

Location Strategy

• Target Metro/Peri-Metro Locations: Cities like Sydney, Melbourne, and Brisbane will see most demand and thus price movement in the sub-cap zone.

• Emerging Regions: Regional centers now also benefit from simplified access and pricing caps.

Risk Assessment

• Leverage Awareness: 5% deposit means a 95% loan-to-value higher borrowing risk. Interest rate changes or personal financial shocks could make this precarious, so stress test scenarios carefully.

Supply Side Watch

• Supply Constraints Matter: Unless matched with increased housing supply, expanded demand could further inflate prices. Monitor new development policies and housing stock trends in your area.

Broader Affordability Context

• Who Benefits Most? While the scheme removes many barriers, critics note that removing income caps might skew access toward higher-income households still leaving lower-income renters behind.