Government’s New 5% Deposit Guarantee Scheme Set to Drive Property Prices Higher
From 1 October 2025, the Federal Government’s new 5% deposit guarantee scheme will officially begin and it’s already generating buzz in the property market. Designed to make homeownership more accessible, the scheme is expected to boost buyer demand across multiple segments and, in turn, apply upward pressure on property prices.
Let’s break down what this scheme means, who it helps, and why it’s likely to influence market conditions heading into 2026.
How the 5% Deposit Guarantee Scheme Works
The scheme allows eligible buyers to purchase a property with just a 5% deposit, while the government guarantees up to 15% of the loan. This means buyers can avoid paying costly lenders’ mortgage insurance (LMI) – a saving that can reach tens of thousands of dollars.
With smaller deposit requirements, more Australians will now be able to enter the property market sooner rather than later.
Why It’s Expected to Lift Demand (and Prices)
Any initiative that helps more people buy property inevitably increases competition – particularly when housing supply is already limited.
Here’s what we’re likely to see:
- Increased buyer activity from first home buyers who were previously priced out.
- More pressure on entry-level properties, especially townhouses and apartments.
- Flow-on price growth across mid-range and family homes as demand ripples through the market.
With Melbourne’s property listings still below long-term averages, even a modest spike in demand could translate into stronger price growth across the remainder of 2025 and into early 2026.
How Different Buyer Groups Benefit
- First Home Buyers: This scheme is a game-changer for those struggling to save a 20% deposit. It allows entry into the market much sooner – particularly appealing for young professionals and couples renting while saving.
- Owner-Occupiers: For those upgrading or downsizing, the guarantee can free up funds for renovations, furniture, or lifestyle improvements. It’s especially beneficial for families looking to transition into a new home while holding on to some of their savings buffer.
- Investors: While investors may not directly qualify for the scheme, they stand to benefit from the ripple effect. As demand surges, property values and rental demand are likely to rise. More first home buyers entering the market also fuels competition for new and affordable housing – sectors where investors often hold properties.
Timing Matters
As the scheme kicks off in October, it’s expected that many buyers will rush to take advantage of the reduced deposit requirements. Acting early before price growth accelerates – could prove beneficial for both owner-occupiers and investors.
For buyers considering off-the-plan properties, this timing could be ideal. Purchasing now can lock in today’s prices while the property continues to build in value ahead of settlement.
Final Thoughts
The Government’s new 5% deposit guarantee scheme is well-intentioned, but with Australia’s ongoing housing shortage, it’s likely to add fresh momentum to property prices, particularly in affordable and high-demand growth corridors.
How Crest Property Investments Can Help
- We help buyers identify the right property, in the right location, at the right time, so that your purchase is strategic, not reactive.
- Whether you’re a first-home buyer or an investor, we offer:
- Free, tailored advice on brand-new and off-the-plan properties
- Due diligence on developers and locations
- A full concierge service from search to settlement
If you’re thinking about taking the next step, we’re here to help you do it confidently with the guidance and support you need to succeed.
Let’s explore what’s possible -your property journey might begin now.
If you’d like some assistance sourcing a brand new or off the plan property, please don’t hesitate contact us.
We would welcome the opportunity to help with your property purchase. Our YouTube channel and Market Insights also provide a wealth of information to assist you with many areas relating to property.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
October 2025
