Around one in 10 properties sold in October was purchased by first-home buyers using the 5% Deposit Scheme.
Government figures show that during the month of October, 5,778 first-home buyer guarantees were issued under the expanded 5% Deposit Scheme, which was formerly known as the New Home Guarantee Scheme. On average, around 57,000 residential homes are sold across Australia each month.
That’s a 48% increase on the same period a year ago, when 3,901 guarantees were issued.
Designed to help eligible home buyers access the housing market sooner and avoid having to pay Lenders Mortgage Insurance, the scheme was expanded from 1 October to remove the limit on the number of places in the scheme. Income caps have also been removed and property price thresholds have been increased to better reflect higher prices in different cities and regions.
National real estate agency Raine & Horne has seen strong demand from first-home buyers since the scheme was expanded.
Raine & Horne has experienced strong first-home buyer demand since the 5% deposit scheme was expanded in October. Picture: Getty
Data from its more-than 300 offices nationally shows that 10% more people attended open homes in October compared to the previous month (September 2025). It attributes the spike to the expanded guarantee scheme now in play.
“The increase in first-home buyer activity is having a ripple effect that is expanding beyond entry-level properties, and helping drive prices higher across the broader market as established homeowners look to upgrade to their second or third properties,” said Angus Raine, executive chairman of the Raine & Horne Group.
Crowded house
While home prices were already accelerating before the scheme kicked in, the latest data shows that the federal government’s 5% Deposit Scheme has boosted demand and activity across the nation’s housing market.
National prices are up 7.5% over the past year, adding about $65,200 to the median home value, which now sits at $858,000, according to the latest PropTrack Home Price Index.
“Market momentum is building amid renewed buyer confidence and improved sentiment, buoyed by earlier rate cuts,” PropTrack senior economist Eleanor Creagh said.
“Looking ahead, this year’s series of rate cuts, population inflows and the expanded Home Guarantee Scheme will continue to bolster demand.”
Meanwhile, mortgage brokers note an increase in foot traffic in open homes and a boost to new buyer enquiries.
Mortgage Choice broker Terence Hammond said the scheme’s expansion has provided a huge boost to momentum ahead of what’s traditionally a quiet December and New Year period.
“We’ve definitely seen an increase in demand from first-home buyers since the Scheme launched on 1 October. It has made a massive difference in demand.”
Mr Hammond recommends first-home buyers get their documentation together and start making enquiries as soon as they have their finances in order, describing the market as ‘aggressive’.
“There’s lots of people turning up to open homes, which is pushing up prices.”
Mortgage sizes grow
The latest Mortgage Choice Home Loan Report shows that rising property prices are prompting many to take on larger home loans, with loan submissions data for the September quarter revealing the national average loan size climbed 8.4% year-on-year to a new record high.
Average loan sizes across the country:
Source: Mortgage Choice Home Loan Report, Sept Qtr. | *Total value of Mortgage Choice loan applications divided by number of applications submitted over the September 2025 quarter.
Mortgage Choice CEO Anthony Waldron said loan sizes rose across every region, taking the national average loan size to more than $660,000.
“Annual growth was highest in Western Australia, where the average loan size rose nearly 12% year-on-year to $588,010.”
Buyers in South Australia and the Northern Territory are also facing increased competition at the affordable end of the market, with the average loan size in the SA/NT region exceeding $600,000 for the first time, with the average loan size up 10.6% year-on-year to $635,664.
“In South Australia, there is a lack of supply of properties in the $600,000 to $800,000 price range, and when these properties list for sale, they’re on the market for less than 30 days,” Mr Waldron said.
“In the Northern Territory, most of the demand is being driven by investors who are being lured by the lowest median home prices in the country.”
Federal Housing Minster Clare O'Neil said the scheme accounts for a small portion of total homes exchanged each month.
With home prices at record highs across the country, housing minister Clare O’Neil said the 5% deposit scheme is helping to cut years off the time it takes a first-home buyer to get into the housing market.
But she said the more-than 5,000 guarantees in October was small in the broader context of the number of homes exchanging.
“We made a promise to first-home buyers that we would help them and that’s exactly what we’re doing,” Ms O’Neil said.
But Liberal Senator Andrew Bragg said the 5% deposit scheme is making Australian homes more unaffordable than ever.
“The Prime Minister and Housing Minister, Clare O’Neil love to brag they are fixing the housing crisis. But the grim reality is if you fail to increase supply and increase demand, higher prices will emerge.”
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