By Dorian Traill December 9, 2025

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One in Ten Homes Now Bought with Just a 5% Deposit — What This Tells Us About Australia’s Property Market

Property Market News
One in Ten Homes Now Bought with Just a 5% Deposit — What This Tells Us About Australia’s Property Market

Key takeaways

One in ten homes sold in October was purchased using the expanded First Home Buyers scheme, with 5,778 guarantees issued, a 48% jump on last year.

Removing caps, income limits, and outdated price thresholds opened the door for thousands of new buyers almost overnight.

Increased buyer participation has flowed right through the market. Open-home attendance is up, competition has intensified, and the early rate-cut cycle has strengthened confidence.

National home values are already climbing, and the scheme has added fresh demand to an undersupplied environment.

Entry-level properties, especially in SA, WA and parts of Queensland, are selling in weeks, not months, with larger crowds and more bidders pushing prices upward.

The scheme cuts years off saving time for many first-home buyers, but without corresponding supply reform, demand-side incentives inevitably lift prices. The scheme didn’t cause the affordability crisis, but it has certainly intensified it.

The hottest segment is now the sub-$800k band, where demand is strongest and supply is tightest.

With population growth, earlier rate cuts and rising rents, investors are positioned to benefit from ongoing upward price movement and deep buyer competition across multiple markets.

Every so often a single statistic captures the mood of the market far better than any forecast or headline.

And the following is a good example of this month, it’s this one:

One in ten homes sold in October was purchased using the federal government’s 5% Deposit Scheme, according to an article in realestate.com.au

That’s extraordinary.

Not just because of the volume, but because of what it signals: a wave of first-home buyer activity that’s reshaping demand across the country, pushing prices higher, and accelerating the property cycle in real time.

Buying a House in Australia

A scheme that opened the floodgates

October saw 5,778 first-home buyer guarantees issued under the expanded 5% Deposit Scheme: a massive 48% jump on the same time last year.

With around 57,000 residential sales per month, this means roughly 10% of all buyers used the scheme.

This wasn’t a gradual lift. It was a step change that occured because the government removed key barriers:

No cap on the number of places
Income limits scrapped
Higher property price thresholds to match real market conditions

Suddenly, thousands who were previously locked out could participate. And they did.

Real estate agencies nationwide reported a noticeable increase in open-home attendance.

Realestate.com.au saw October inspections rise 10% on the prior month, and they directly attribute this jump to the expanded scheme.

Note: That early buyer activity has a domino effect: first-home buyers purchase, sellers upgrade, and the entire market shifts gears.

Prices are already rising and momentum is building

The property market was heating up before the scheme expanded, but the latest PropTrack Home Price Index shows momentum is now clearly accelerating.

PropTrack senior economist Eleanor Creagh summed up the dynamic perfectly:

“Market momentum is building amid renewed buyer confidence and improved sentiment, buoyed by earlier rate cuts.

Looking ahead, this year’s series of rate cuts, population inflows and the expanded Home Guarantee Scheme will continue to bolster demand.”

Clearly, we’re still early in this next upswing.

With migration strong, sentiment improving and borrowing conditions easing, the expanded scheme hasn’t just added buyers, it has amplified market confidence.

On the ground, competition intensifies

Anyone attending auctions or open homes lately doesn’t need data to confirm what they’re seeing: more people through the door and more bidders on the day.

Agents across the country report:

Larger crowds at inspections
Shorter days-on-market
Stronger interest in sub-$800k properties
Disappointment from buyers repeatedly missing out

These behavioural signals often appear before price growth shows up in the data. And right now, they’re flashing bright.

Some regions, particularly in SA, WA and pockets of Queensland, are experiencing such intense competition that entry-level homes rarely last more than a few weeks on the market.

This upward pressure is exactly what you expect when demand lifts sharply and supply remains painfully slow.

The debate: helping buyers… or pushing prices up?

Housing Minister Clare O’Neil argues the scheme is shaving years off the saving time for first-home buyers.

She’s right; for many, it does.

But critics argue the scheme is worsening affordability by stimulating demand without addressing the supply crisis.

They’re right too, because both realities can exist simultaneously.

This is the recurring theme in Australian housing policy:

Every demand-side sweetener eventually flows into price growth unless matched with supply-side reform.

So while more than 5,000 guarantees in one month sounds like support, the broader effect is more competition, higher prices, and fewer bargains.

The scheme didn’t create the affordability problem. But it certainly magnified it.

What this means for property investors

Here’s the strategic takeaway for seasoned investors:

1. The entry-level market is now the hottest segment

Any time you boost first-home buyer activity, you energise the entire lower-to-middle price band.

Expect sustained competition here.

2. Price growth will continue flowing upward

As first-home buyers purchase, homeowners upgrade, lifting demand in mid-tier and premium suburbs.

3. Supply constraints remain the biggest issue

Planning bottlenecks, construction delays and developer insolvencies mean new stock will not arrive fast enough to cool prices.

4. We’re entering an investor-friendly phase of the cycle

Population growth, early rate cuts and rising rents make this a supportive environment for long-term investors.

Final thoughts

The expansion of the 5% Deposit Scheme didn’t just help first-home buyers; it accelerated the entire market.

It has increased competition, raised prices, and reignited activity just as sentiment was improving.

But for those who understand Australia’s chronic undersupply and long-term demand drivers, none of this should be a surprise.

This is simply the next chapter of a story we’ve watched unfold for decades.

The investors who do best in times like these are the ones who read the ripple effects early, and position themselves before the rest of the market catches on.

About Dorian Traill Dorian is a Senior Wealth Planner at Metropole and helps develop a tailored, individualised wealth plan specifically for the client’s circumstances. Dorian’s career in property and finance started in 1997 as a sales agent in Brisbane before he switched to mortgage broking. He has been advising clients on how to successfully grow their wealth through property for a number of decades.