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Is the 5% Deposit Scheme Driving Up Home Prices?
Understanding the Impact on First-Home Buyers
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The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Recent analyses indicate that the Australian Government's 5% Deposit Scheme, designed to assist first-home buyers, may inadvertently be contributing to rising property prices.
Data from the Australian Bureau of Statistics (ABS) reveals a significant increase in mortgages issued to first-time buyers, with $19.310 billion recorded in the December quarter of 2025-a 16% rise from the previous quarter and the highest since early 2021.
Furthermore, the average size of these mortgages has reached a new peak of $607,500, marking an 8.3% increase in the same period. This trend suggests that while the scheme facilitates easier market entry, it also intensifies competition for affordable properties, potentially driving up prices.
Experts caution that this dynamic could lead to higher loan-to-value ratios for buyers, increasing financial vulnerability, especially if interest rates rise or property values stagnate. Prospective buyers are advised to consider these factors carefully and seek professional financial advice to navigate the complexities of the current housing market.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
Refinancing a fixed-rate mortgage can offer Australian homeowners opportunities to secure better loan terms or access additional features. However, it's crucial to understand the potential break costs associated with ending a fixed-rate loan prematurely. - read more
As of 2026, Australian homeowners are presented with competitive mortgage refinance interest rates, making it an opportune time to consider refinancing. With the Reserve Bank of Australia adjusting the cash rate earlier this year, many lenders are offering refinance options starting in the low 5% per annum range for well-qualified applicants. - read more
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