Cotality’s September Monthly Housing Chart Pack reveals the fast-tracked expansion of the federal government’s Home Guarantee Scheme will significantly widen opportunities for first-home buyers.
Effective from Oct. 1, the scheme will remove income and place limits, while lifting property price caps across most regions.
The scheme allows eligible first-home buyers to purchase with a 5% deposit without paying lenders mortgage insurance.
Under the old price caps, only a third of the 4,848 house and unit markets analysed nationally had a median value below the limits. With the new settings, that proportion rises sharply to 63.1% – including 51.6% of house markets and 93.7% of unit markets.
Cotality economist Kaytlin Ezzy (pictured) said the changes would give first-home buyers much greater freedom of choice.
“Previously, to qualify for the scheme, first-home buyers were largely restricted to more affordable housing options, including units and houses in outer mortgage belts and regional markets,” Ezzy said in a media release.
The timing also coincides with Reserve Bank rate cuts, which are easing borrowing costs and boosting affordability. The cash rate now sits at 3.6% after three cuts in 2025, moves expected to help more first-home buyers enter the market, according to the PropTrack CommBank First-Home Buyer Report 2025.
This renewed policy and rate environment is already feeding into stronger sentiment. Resolve Finance’s annual Generation Rent Report found that 57% of renters plan to buy their first home or investment property in the next two years – up from 42% last year.
Ezzy highlighted how the old caps had priced out many buyers.
“Since the caps were last revised in 2022, values across the mid-sized capitals have grown significantly, which has seen first home buyers reliant on the scheme to purchase a house, essentially priced out,” she said.
For example, under the previous settings, Perth buyers only had access to Medina ($590,786) and Mandurah ($589,965) as suburbs with a median house value under the $600,000 cap. In Brisbane and Adelaide, choices were also limited, with only 36.9% and 41.3% of suburbs respectively falling below the old limits.
With the new thresholds, Sydney and surrounding regions such as the Illawarra, Newcastle and Lake Macquarie rise to a $1.5 million cap – $600,000 higher than before. Southeast Queensland and Adelaide’s limits have jumped by $300,000 to $1 million and $900,000 respectively.
The new caps dramatically increase the share of markets available to first home buyers:
Nationally, 51.6% of house markets and 93.7% of unit markets now fall under the new limits
Adelaide recorded the largest increase for houses, with 46.6% of suburbs (130) now qualifying, up from just 2.9% (8) previously
Brisbane saw the biggest proportional lift for units, with 97.5% of suburbs (153) qualifying, up from 36.9% (58)
“While this is a demand-side policy that will undoubtedly put some upward pressure on values, it will help create a more equitable starting point and provide more options for those looking to get on the property ladder,” Ezzy said.
The PropTrack CommBank report echoed these themes, noting that while affordability remains challenging, lower mortgage rates, government schemes and low-deposit loans are helping more buyers into the market.
“Saving for a deposit is the key hurdle for first-home buyers, creating a substantial savings burden,” said Angus Moore, REA Group senior economist. “On top of this, record low housing affordability and tough mortgage serviceability have been significant challenges.”
National housing values and sales momentum build
Beyond the scheme changes, Cotality’s September update also points to strengthening market momentum:
The combined value of Australian residential real estate rose to $11.7 trillion at the end of August
Dwelling values climbed 1.8% in the three months to August, the fastest quarterly gain since Q2 2024. Annual growth has accelerated to 4.1%
Brisbane and Perth values lifted 1.2% and 1.1% in August, while Darwin led with 5% quarterly growth and 10.2% annually
Sales volumes reached 43,436 in August, bringing the 12-month total to 538,329, up 2% year-on-year
Listing activity rose 9.4% in August, with easing rates and rising sentiment setting the stage for a strong spring selling season
Cotality also reported building momentum in the rental market. Since bottoming in June, the annual growth rate in capital city rents has lifted to 3.4%, while regional rents accelerated to 5.8% over the year to August.
Approvals fell back in July, with total dwelling approvals down -8.2% after a sharp rise in June. Unit approvals dropped -18.8%, while house approvals edged up 0.6%.
Cotality’s “Chart of the Month” compares the new Home Guarantee Scheme price caps with each region’s current house and unit medians. It shows that under the expanded caps, first-home buyers will have access to 63.1% of markets nationally, a substantial increase from the one-third previously available.
According to CommBank, the average loan-to-value ratio for a first-home buyer is around 85%, meaning many are purchasing with less than a 20% deposit. Combined with the expanded Home Guarantee Scheme, analysts expect these factors to underpin stronger first-home buyer activity over the year ahead.
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