Page 2 - Wealth-Adviser-Issue-122 (FWP)

ISSUE 122
OCTOBER 2025

What’s New in the Scheme: Details and “Advisers highlight that new buyers now have access
Eligibility to a range of lenders and can choose homes that suit
From 1 October 2025, the Home Guarantee Scheme de- both budget and lifestyle.”
livers a suite of new features designed to broaden access and – Realestate.com.au
increase flexibility. Notably, the reform introduces unlimited
places for first-home buyers, removes income caps, and Importantly, single parents and those re-entering the
raises property price thresholds in many cities and regions. market can benefit from the scheme’s more inclusive
All eligible Australians can now apply with as little as a 5% approach, further contributing to a broader demographic
deposit, sidestepping the costly Lenders Mortgage Insurance of home buyers. The removal of waiting lists and income
that was previously a requirement for lower deposits. caps means that more Australians can attempt to access the
For instance, the property price cap for Sydney stands at property ladder on their own terms.
$1.5 million, while buyers in Brisbane can purchase homes
up to $1 million under the scheme. These adjustments are The Illusion: Criticisms and Concerns
intended to reflect market realities and to offer buyers a Despite the promise of expanded opportunities, critics
chance to secure homes that formerly sat beyond reach. warn that the Home Guarantee Scheme may be “more
illusion than solution” for many buyers. Various analysts
“From October, the scheme will allow more and economists have raised concerns about unintended
Australians to buy with as little as 5% deposit and consequences, especially the potential for price inflation
access more expensive properties.” and the exacerbation of existing supply shortages.
– Housing Australia
“Expanding the scheme risks pushing prices higher,
Eligibility criteria now encompass a wider range of prop- making homes ultimately less affordable.”
erty types including houses, townhouses, units, and off-the- – Insurance Council of Australia
plan purchases. Further, single parents can qualify with a
minimum 2% deposit, providing critical support where it is Multiple sources suggest the demand-side stimulus—
needed most. The expanded scheme reflects the Albanese unlimited spots and higher price caps—will likely fuel
Government’s broader housing agenda, aimed at creating increased competition for a limited supply of properties,
long-term change for younger buyers and those traditionally resulting in higher prices and diminished affordability over
locked out of the market. time. The challenge is compounded in metropolitan centres
where capacity for new builds lags behind demand.
The Opportunity: Benefits for First-Home Buyers Key economists and industry commentators also note
For many first-home buyers, these reforms represent a that raising the eligibility cap does not address the root of
genuine opportunity to accelerate the journey from saving Australia’s housing crisis: a chronic shortage of new and
to ownership. By lowering the deposit hurdle, the scheme affordable dwellings. The influx of new buyers could further
makes it possible for young Australians and those with disadvantage those who are unable to take advantage of the
limited savings to purchase homes much sooner. Buyers can scheme, particularly if prices spike faster than incomes.
potentially save up to a decade of time by meeting only the
5% threshold rather than the standard 20%. “Major changes to a popular scheme are about to shift
Australia’s housing market forever—and experts warn
“First-home buyers can enter the market sooner, there are hidden risks.”
avoiding Lenders Mortgage Insurance and potentially – Realestate.com.au
building equity faster.”
– SBS News Some advisers caution that buyers must carefully consid-
er the implications of higher monthly repayments associated
Savings on Lenders Mortgage Insurance alone have been with minimal deposit mortgages—while entry is easier, the
estimated at around $42,000 for median-priced Australian risk profile is fundamentally different. The scheme may also
homes, with some buyers shaving years off their depos- encourage over-leveraging, leaving buyers exposed in the
it-saving timeline. These structural changes are expected to event of market corrections or rate increases.
give many aspiring homeowners a meaningful alternative
to renting and offer greater choice of lenders and property Navigating the Risks: Adviser Strategies and
types. Practical Steps
In this evolving landscape, financial advisers play a

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