Unusually strong home value gains in October coincided with the federal government’s expansion of the 5% deposit scheme, which now allows eligible first-home buyers to secure a low-deposit loan without lender’s mortgage insurance.
From Oct. 1, the scheme moved to unlimited places, widened income eligibility, and increased price caps across most regions.
National home values rose 1.1% in October, the fastest monthly growth rate since May 2023. Momentum had already been building following the first rate cut in February, with seasonal factors and low stock also supporting price increases.
The higher price caps introduced on Oct. 1 vary by region and city tier.
These thresholds shaped the comparison of growth between properties above and below the caps.
Properties valued under the new thresholds continued to outperform in October — a trend that has persisted for nearly two years. The Cotality analysis notes that “serviceability and affordability constraints” have pushed even higher-income buyers toward lower-value segments.
The uplift was within normal ranges for most markets, though some areas saw more pronounced impacts. These included premium Sydney regions such as Northern Beaches, North Sydney and Hornsby, and the Eastern Suburbs, as well as Melbourne’s Inner East, and regional centres like Wide Bay, Geelong and the Central Coast.
The results were generated using the Cotality Home Value Index, drawing on individual property-level value estimates. New indices were created to track values above and below the updated price caps, covering national, capital city, regional and SA4 levels. The data series extends back to December 2009.
In October, homes within the scheme’s price caps rose 1.2%, compared with 1% for those above — a difference of 22 basis points. As the report explains:
“Lower-value properties have outperformed the higher end of the market for the better part of two years,” Cotality said.
The differential ranks in the 84th percentile of differences since 2009.
Both results were historically strong, sitting at the 84th–85th percentile.
Every capital except Hobart and the ACT saw stronger growth for homes below the caps. High percentile rankings were recorded in:
Melbourne and Brisbane posted above-70th percentile readings.
Regional markets in VIC, WA, SA, and QLD showed strong low-end outperformance, with September’s results even stronger, suggesting additional demand drivers beyond the scheme’s expansion.
Regional NSW saw an unusual 1% rise for both above-cap and below-cap segments — well above its 2025 monthly average of 0.4%.
The largest gaps appeared in lower-value pockets of premium markets. Melbourne’s Inner East led the country, with sub-cap homes rising 1.7%, compared with 0.4% for homes above $950,000 — a gap in the top 9% historically.
Sydney’s Northern Beaches also featured prominently: sub-$1.5m properties rose 0.9%, while higher-end values were flat. Regional Geelong and the Central Coast were also top performers.
In Darwin, outperformance may reflect rising investor activity targeting lower-value homes. The city was also one of the few where price caps did not increase, with only 19% of suburbs under the $600,000 limit.
The Cotality data shows a clear uplift in lower-value markets through October, but:
“Historic growth trends suggest this was happening in recent months before the expansion of the 5% deposit scheme,” it said.
It may be too early for the full effects of the expanded scheme to appear in price behaviour. The expansion remains just one of multiple factors driving low-to-middle-market strength.
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