3rd May 2025 came with positive news for first-home buyers. With Anthony Albanese winning a second term as Prime Minister, housing affordability is back in focus. That’s because the government has proposed key updates aimed at making it easier for Aussies to buy their first home.
But what exactly changed? How much could first-home buyers save now?
Proposed Update on 5% Deposit Scheme
The first home guarantee (5% deposit scheme) will now be updated
- You only need a 5% deposit to buy your first home.
- The government guarantees the remaining 15% to help you reach a 20% deposit, avoiding Lenders Mortgage Insurance (LMI).
- This means more relief to first-home buyers from one of the significant upfront costs.
- It will further ensure more favourable interest rates for them.
Change In Income Limits
Previously, there were income limits:
- $125,000 for singles
- $200,000 for couples
But now, it’s proposed that these limits will be completely removed. That means more homebuyers can qualify, even if they are earning above these thresholds.
Shift in Property Prices
Depending on your state, you may be able to buy a home at a higher price point and still qualify. For example, in Sydney, you could buy a $1 million home with just a $50,000 deposit, plus stamp duty and other costs
This could allow more first-home buyers to enter the market without worrying about finances. However, this approach also carries risks, such as an increase in competition for housing. As a result, this approach can increase prices, which may negatively impact first-home buyers.
Research indicates that, due to the current situation, prices may increase by up to 15%, which could pose a significant challenge.
Additionally, the ongoing shortage of housing presents another significant problem today. That’s because currently the government is lagging by around 462,000 homes from its target of 1.2 million new homes by 2029.
Prohibition On Foreign Homebuyers
Since the housing shortage is the major concern, the government
- Banned non-residents from buying existing homes for two years.
- The goal is to increase the home supply for Australian citizens.
Along with this, the government also committed to
- Spend $10 billion to build 100,000 new homes.
- Deliver 1.2 million homes by 2029 under the National Housing Accord.
- Build more social and affordable homes through accelerator programs.
- Offer apprentice incentives to convince more workers to construction and clean energy sectors.
More Funding For The Help-To-Buy Scheme
The government will further increase funding for the shared equity scheme (Help to Buy).
- Now, around 40,000 first-home buyers co-buy their homes with the government.
- An extra $800 million is committed to this scheme.
- You can cover part of the cost, reducing your loan and repayments.
What Should First-Home Buyers Do Now?
While these policies aim to support buyers, timing and planning are key. So, first home buyers should
- Check if they’re eligible for these schemes
- Monitor property values, particularly in areas with high demand.
- Pre-assess their finances to avoid complexities.
- Consult a reliable mortgage expert to find the best loan and government support options.
For more information, contact Nfinity Financials or book a consultation call at 1300 GET LOAN, 0456 456 267.
