Many of you will likely be aware of the upcoming 5% deposit scheme being introduced by the Albanese government on 1 October 2025, enabling first home owners to put forward a 5% deposit to secure a home instead of the standard 20% most first home owners need to buy a home.
To put it into context, a buyer looking to buy a $1 million home who would have needed a $200,000 deposit (20%) will now only require a $50,000 deposit to buy the same $1 million home.
This allows buyers to get into the market significantly quicker, eliminating many months (and years) to start a nice lifestyle they previously would have needed to wait far longer for.
This article on RealEstate discusses this topic further, highlighting that while this is likely to drive up prices, it will also give developers a reason to increase their number of builds (supply) to cater for the drive in first home buyers - https://www.realestate.com.au/news/how-price-increases-could-have-been-avoided-with-the-governments-5-deposit-scheme/.
What will be interesting to see is the effect this will have on the overall housing market, including impacts to both home owner and property investor markets, and the varying impacts per state (and specific cities and regions within the states).
Go to our latest LinkedIn poll question on this topic to answer if you are for or against this policy - https://www.linkedin.com/posts/propertydirector_do-you-welcome-the-5-deposit-scheme-for-activity-7368136801087127553-7D2l?utm_source=share&utm_medium=member_desktop&rcm=ACoAAACvB28Bk8boFfLbbjFFAXfUnmpRxIpjQXo.