When the Federal Government expanded the First Home Buyer 5% Deposit Scheme on 1 October 2025, it opened the door for more Australians to enter the housing market with just a small deposit, removed income limits and placement caps, and increased property price thresholds for eligibility. In our September article, we walked through what those changes meant for buyers and why they were expected to boost activity.
Now, four months in, there are some clear trends emerging, backed by fresh market data.
How much has take-up grown?
According to government figures issued by Broker Daily, 5,778 first home buyer guarantees were issued in October 2025, the first month after the expanded scheme launched. That was 48% higher than the same month a year earlier, when 3,901 guarantees were issued under the older rules. Roughly one in 10 homes sold in October was bought by a first home buyer using the scheme.
This surge suggests that buyers are responding to the policy change, not just in theory but in real purchasing behaviour.
Prices at the lower end are rising faster
New analysis from property data firm Cotality shows that homes priced within the scheme’s expanded caps grew by about 3.6% in the December quarter, compared with 2.4% growth for homes above the price limits. This pattern held across nearly nine in 10 regions, signalling stronger demand where first home buyers are most active. (Broker Daily)
This aligns with broader market commentary that the affordable end of the market is now outperforming both the median and upper quartile segments, with entry-level price growth outpacing other tiers.
Loan demand and entry-level activity have jumped
Data from mortgage reporting also shows a shift in lending patterns. First home buyer activity in the $750,000–$1 million loan size range soared around 70% in October 2025, with overall mortgage demand for first home buyers up about 14% year-on-year.
This reflects buyers targeting properties closer to the scheme’s price ceilings for many cities, rather than only the lowest-priced homes.
Competition in the market has stepped up
Alongside these figures, broker sentiment has been strongly positive. In surveys taken around the peak of scheme rollout, almost nine in 10 brokers expected first home buyer demand to rise faster than any other segment of the market once the expanded scheme took effect.
On the ground, real estate agents and our buyers agents have been reporting more multiple-offer situations and shorter selling periods in suburbs where first home buyers are most active.
Is the policy helping affordability?
There’s no doubt the policy has helped more buyers officially enter the market, but it has also added pressure on prices where supply is already tight. Lower-priced homes, the very properties that the scheme was meant to make more accessible, have surged in price because of strong demand and limited listings.
Some commentators, including economists and housing analysts, have noted that the increase in first home buyer activity comes at a time when stock levels remain low and broader affordability remains stretched. These market forces can push prices higher even as buyers gain easier access to finance.
So what are we seeing on the ground in our markets?
Sydney (Northern Beaches & Lower North Shore)
The expanded FHBS is helping keep entry-level properties on the Lower North Shore and Northern Beaches competitive. Apartments and lower-priced houses remain the strongest performers, with demand supported by first-time buyers and investors alike. While the broader market is more patchy and high-end homes have softened, the scheme is giving new buyers a real opportunity to enter a market.
Brisbane
The scheme has injected a surge of new buyers into Brisbane’s market, compressing years of saving into just a few months. Competition is fierce, especially in the sub-$1 million segment and for units priced $650,000–$900,000. Many first-time buyers are now looking at townhouses or outer suburbs like Redlands and Moreton Bay, as entry-level houses near the CBD have pushed above $1 million. The scheme is clearly giving buyers a chance to enter a market that remains strongly favoured towards sellers.
Melbourne
The Federal Government’s 5% deposit scheme has given first home buyers a clear boost in Melbourne, particularly in metropolitan properties under $950,000 and regional homes under $650,000. This surge in demand has lifted values in these brackets, with buyers competing alongside interstate investors and local upgraders. Well-located family homes and boutique apartments are particularly sought after, making the scheme an important driver in a market that continues to reward quality a-grade properties.
Gold Coast
The scheme is helping more buyers enter the Gold Coast market, particularly in northern suburbs like Oxenford, Upper Coomera, and Coombabah, where prices remain more affordable. With median house prices over $1.1 million and strong unit growth, the scheme is giving first home buyers a vital boost in a market that’s otherwise favouring sellers.
Sunshine Coast
The scheme is helping fuel strong demand on the Sunshine Coast, particularly for houses and apartments in affordable suburbs. With limited supply, high interstate migration, and ongoing infrastructure projects, first-time buyers are competing alongside investors, contributing to notable price growth.
Newcastle
The scheme is helping fuel strong demand in Newcastle, particularly for properties under $1.5 million. Low stock levels and rising interest from buyers seeking an affordable coastal lifestyle have made competition fierce. The scheme is giving first-time buyers a real opportunity to enter a market that continues to show strong growth, supported by new developments, infrastructure projects, and ongoing migration from Sydney.
How PMC Property Buyers are helping first home buyers right now
With all this momentum and competition, professional support and guidance matters more than ever. At PMC Property Buyers we’re helping first home buyers make informed purchase decisions so they don’t make a costly mistake with the current market pressures they are experiencing as a result of the expanded FHBS.
What first home buyers should keep in mind going forward
If you’re planning to buy in the next few months, getting prepared early will put you in a much stronger position. That means having pre-approval in place, knowing your maximum comfortable budget, and understanding which parts of the market genuinely match your buying brief.
The expanded 5% deposit scheme has created opportunity, but it has also made parts of the entry-level market more competitive. Seeking professional advice early can help you move with confidence rather than rush into decisions under pressure.
In Summary
Four months after the expanded 5% deposit scheme kicked in:
- First home buyer activity and guarantees issued have climbed sharply compared with last year.
• Lower-priced homes eligible under the scheme have seen stronger price growth than more expensive properties.
• Loan demand in key price bands has jumped, with more buyers targeting properties near the new price caps.
• Brokers are widely expecting first home buyer demand to continue rising.
For first home buyers, the opportunity is still there. But in a more competitive and fast-moving market, having a clear strategy and expert support will make all the difference.
Looking to buy your first property?
With the new First Home Guarantee changes, our team can help you navigate the market and secure the right place.