Starting October 1, 2025, a bold new initiative by the Australian government is set to change the game for first-time homebuyers. With the introduction of a much-anticipated scheme, all eligible buyers can now enter the property market with a deposit as low as 5%, regardless of their income. But is this really the lifeline some expect it to be, or will it simply push prices even higher?
A Game-Changer or a Short-Term Fix?
The federal government’s decision to expand the First Home Buyers Scheme has stirred a lot of conversation. On one hand, it’s a win for those who’ve been struggling to save a sizeable deposit. Lowering the entry barrier to homeownership could allow many people to take their first step onto the property ladder sooner than expected. This is especially true for young buyers, who have faced mounting pressure from rising property prices and living costs.
The idea is simple: make homeownership more accessible, and give buyers a fighting chance in what can often seem like a completely unaffordable market.
Concerns About Rising Prices: The Dark Side of the Scheme
However, not everyone is celebrating this change. Independent economist Saul Eslake, speaking with Sky News Australia, voiced a more cautious perspective. While he acknowledges that the scheme might benefit some buyers in the short term, he raised concerns about its long-term impact. The central issue? It could exacerbate the very problem it’s trying to solve—by inflating housing prices even further.
As more people gain access to home loans with smaller deposits, demand for properties will inevitably increase. More buyers in the market, without a corresponding increase in supply, could drive up prices, making it harder for those same buyers to afford homes in the future.
What Does This Mean for Buyers?
What’s also worth considering is how buyers will take advantage of this scheme. While it does offer a quicker route to property ownership, it’s not an automatic solution. Prospective homebuyers will still need to arrange their financial affairs carefully. It’s not as simple as just putting down 5%—there are still other costs involved, such as mortgage insurance, ongoing repayments, and the possibility of interest rate fluctuations.
A Long-Term Solution or Temporary Relief?
At the same time, the question remains whether this scheme is a long-term fix or just a quick patch-up. The property market has seen consistent price hikes in recent years, often outpacing wage growth. So, while lowering the deposit requirement might make homeownership seem within reach for some, it doesn’t address the underlying issue of affordability in the broader housing market.
For many, the concern is that this scheme may only push the dream of owning a home further out of reach.
