First-home buyers face risk of owing bank more than homes are worth

The Albanese government’s expanded first-home buyer support has helped many buyers get into the market with small deposits. First-home buyers who used the Albanese government’s flagship housing support scheme in key capital city areas have been warned there is a high chance they’re repaying a mortgage worth more than their home. Explosive figures have revealed two in five Sydney properties eligible for the government’s 5 per cent deposit scheme have had value falls exceeding 5 per cent since the program’s expansion in October. Negative equity risk was even higher in Melbourne, where close to half the properties eligible for the scheme recorded price drops, while in Brisbane it was close to a quarter of properties. These price falls would be particularly devastating for anyone who bought using the Australian Government 5 per cent Deposit Scheme, as the drop in value would wipe out their deposit, putting them into negative equity. This home in Sydney suburb Fairfield recently sold for $1.45m, just under the Sydney cap. Dwellings in the city region have fallen in value by an average of 8.1 per cent since October. It would also mean taxpayers would be on the hook for covering higher lo...