Australia’s Housing Market: Navigating the First Home Guarantee Scheme

The Albanese government's new First Home Guarantee scheme, effective from Wednesday, aims to assist first-time home buyers by enabling them to purchase property with just a 5% deposit.

This means buyers won’t need to pay lenders’ mortgage insurance, as taxpayers will underwrite 15% of the mortgage.

This initiative has generated a lot of interest among potential buyers.

Research from Lateral Economics projects that this scheme could lead to a national house price increase of 3.5% to 6.6% by 2026, with sustained growth expected thereafter. However, in segments specifically targeted by first-home buyers under the scheme’s price caps, prices are anticipated to rise more sharply, ranging between 5.3% and 9.9%.

Sally Tindall from Canstar warns that the scheme is likely to amplify demand in an already heated property market, especially given the recent series of cash rate cuts. She suggests that banks see the scheme as an opportunity to expand their lending portfolios.

Cotality highlights a potential downside, noting that buyers using the scheme could pay over $130,000 more in interest over a 30-year loan at a steady 5.5% interest rate, compared to traditional mortgages.

Mortgage brokers, like Nathaniel Truong from Sydney, have observed heightened competition among buyers who can now borrow more due to the scheme. Truong shares examples where clients have increased their property budgets significantly, questioning whether savings on mortgage insurance translate into actual savings when overall spending climbs.

Eliza Owen from Cotality cautions that while early adopters of the scheme might benefit, subsequent first-home buyers could face challenges. As prices inflate, future entrants will confront a tougher market with higher prices and mortgages leading to greater debt burdens.

Owen raises concerns that small deposit requirements could lead to negative equity if the market experiences a downturn. Moreover, she posits that the government might be compelled to maintain policies that foster rising property values to safeguard their guarantee investments.

This intertwining of public policy and housing market dynamics suggests a move toward a state-backed property market, which could complicate efforts to stabilize or reduce prices in the future.

Published:Tuesday, 7th Oct 2025
Source: Paige Estritori

Share this news item:

Finance News

Crusader Caravans Triumphs as 2025 Manufacturer of the Year

08 Oct 2025: Paige Estritori

Crusader Caravans has once again demonstrated its leadership in the Australian caravan industry by securing the Manufacturer of the Year award for 2025, presented by Caravan Industry Victoria (CIV). This marks the fourth time the company has received this prestigious accolade, underscoring its unwavering commitment to excellence in caravan and RV manufacturing. - read more

NRMA's Review Crew: Your Ticket to Authentic Australian Adventures

08 Oct 2025: Paige Estritori

The NRMA has unveiled an exciting initiative aimed at enriching the travel experiences of Australians: the My NRMA Rewards Review Crew. This program invites members to participate in unique journeys across the country and share their authentic experiences, providing valuable insights for fellow travelers. - read more

Crusader Caravans' Buyer’s Guide: A Must-Read for Prospective Owners

08 Oct 2025: Paige Estritori

Crusader Caravans has observed a remarkable surge in interest for their comprehensive Buyer’s Guide and Checklist, with downloads doubling over the recent holiday period. This trend underscores the growing demand among Australians for reliable information to guide their caravan purchasing decisions. - read more

ACCC Warns Caravan Retailers: Uphold Consumer Rights or Face Reforms

30 Sep 2025: Paige Estritori

The Australian Competition and Consumer Commission (ACCC) has issued a stern warning to caravan retailers, highlighting concerns over misleading advertisements and pricing practices that could lead to significant consumer harm. The watchdog's recent report exposes serious failures within the industry, particularly regarding inaccurate information about prices and vehicle weights. - read more

Click for more Finance News

Caravan Loans Articles

The Essential Checklist for Choosing a Caravan That Suits Your Lifestyle

In recent years, the call of the open road has been answered by more and more Australians through the timeless tradition of caravanning. Sparked by the pursuit of freedom and the comfort of having a home on wheels, the caravan lifestyle has seen a resurgence in popularity. This phenomenon isn't just about being on holiday; it's about the independence and flexibility that comes with owning a caravan. - read more

Top Mistakes to Avoid When Storing Your Caravan

As any caravan owner will tell you, taking your mobile home on the road is an adventure like no other. But what happens when you are not exploring the great outdoors? Proper storage plays a critical role in the care and longevity of your caravan. - read more

Essential Considerations for Managing Your Caravan Finance Effectively

Welcome to your first step towards financial liberation in the world of caravanning! Managing your caravan finance effectively is more than just making regular payments; it's a path to freedom on wheels. Understanding the nuances of caravan finance can unlock the door to early repayment and savings in interest, benefiting you in the long run. - read more

Top Tips For Buying A Second-Hand Caravan

Whether you’re a first-time buyer or an experienced caravanner, there are a few things you should keep in mind when purchasing a second-hand caravan. In this article, we’ll outline the top tips for buying a second-hand caravan so that you can make an informed decision and end up with a caravan that suits your needs and budget. - read more

Understanding Caravan Loans: Answers to Your Most Common Queries

In recent years, many Australians have embraced caravanning as a popular lifestyle choice. With the freedom to explore vast landscapes and the comfort of home on wheels, caravans offer a unique travel experience. Whether for short road trips or prolonged adventures, the appeal is undeniable. - read more

Start Here

Get a free caravan finance eligibility assessment and compare options tailored specifically to your circumstances.

Knowledgebase

Equity:
The amount of (or that portion of) an asset actually owned. Equity is the difference between the market value and the current amount of money still owing on the loan. This is also referred to as the owner�s interest.

This website is owned and operated by Clark Family Pty Ltd (as Trustee for the Clark Family Trust) 43 Larch Street Tallebudgera QLD 4228, A.C.N. 010281008, authorised credit representative of Saccasan Pty Ltd, Australian Credit License 386297. Visit the ASIC website for additional licensing information.

IMPORTANT: We are neither authorised nor licensed to provide finance or financial products and we do not offer any form of credit or other financial advice. All product enquiries and requests for financial and/or other advice on this website are referred to third party intermediaries, insurers and lenders - with whom you can then deal directly. We may receive a fee or commission from these third parties in consideration for the referral. Before any action is taken to obtain a product or service referred to by this website, advice should be obtained (from either the third party to whom we refer you or from another qualified intermediary) as to the appropriateness of obtaining those products having regard to your objectives, financial situation and needs. Whilst we have our own process for vaidating the legitimacy of our referral partners, you should always verify the credentials of your financial adviser before proceeding with recommendations that they may present. Visit the ASIC website for further information.