Why Many Buyers Rushed to Purchase Before the 5% Deposit Scheme Began

Published: October 2025  |  Source: 9News / April Glover

💡 Government Launches 5% Deposit Scheme

As of October 1, 2025, the Australian Federal Government has launched its new
five-per-cent deposit scheme, allowing first-home buyers to enter the property market with
only 5% down instead of the traditional 20%.

The program also waives Lenders Mortgage Insurance (LMI), potentially saving buyers
tens of thousands of dollars.
Additionally, price caps have been raised nationwide to reflect current market prices:

• Sydney: $900,000 → $1.5 million
• Melbourne: $800,000 → $950,000
• Brisbane: $700,000 → $1 million

There are no income or location limits, meaning all Australian first-home buyers can apply —
a first in national housing policy.

🏠 Real Buyers Racing the Clock

Sydney resident Linh Hoang (29) and her fiancé Jeffrey bought a
house and land package in western Sydney just before the scheme began.
They feared prices would climb even further once it took effect.

“It was actually better buying before the scheme because prices had already gone up,” Linh said.
“Once it starts, it’ll only get more competitive.”

Experts, including Melinda Jennison of REBAA, confirmed
“properties that sold for $750,000 last month are now selling for close to $800,000.”
Some buyers are reportedly making sight-unseen purchases or
overpaying to secure a property before the deadline.

📈 Expert Concerns: Who Really Benefits?

Dr. James Graham, Senior Lecturer at the University of Sydney and former economist at the Reserve Bank of New Zealand,
warned that the scheme may primarily benefit high-income earners who can service large loans.

“It’s not designed for typical middle-income buyers,” he said. “It favours those with big salaries but small savings.”

Dr. Graham predicts the policy could drive an extra 3–6% increase in property prices,
particularly for homes just below the $1.5 million cap in Sydney.

🧭 What It Means for Buyers

While the new deposit scheme reduces entry barriers, it may also fuel competition
and raise prices across key markets.

• 🏡 Review your borrowing capacity before October deadlines.
• 📍 Explore outer suburbs for affordability and growth potential.
• ⚖️ Avoid panic buying – focus on long-term fundamentals.

Better Life Property Group Insight

At Better Life Property Group, we believe informed decisions
are the key to successful homeownership.
Our team helps buyers navigate policy changes, interest rates, and market competition
with expert guidance and data-driven insights.

📞 Contact us today
to build your first-home strategy with confidence.