Following Labor’s decisive victory in the 2025 federal election, the government has confirmed the uncapped, universal rollout of its expanded 5% deposit scheme for first home buyers.
This landmark policy change eliminates Lenders Mortgage Insurance and removes previous eligibility caps, opening the door for a flood of demand in the entry level housing market.
For investors, this represents a structural demand shift that cannot be ignored.
The New Policy: A Fully Expanded First Home Guarantee
As of January 2026, all eligible first home buyers across Australia will be able to purchase a property with only a 5% deposit, without paying LMI.
Under the previous First Home Guarantee, eligibility was limited by income thresholds and relationship status. These restrictions have now been removed entirely.
Key Elements of the Confirmed Scheme:
- Deposit Requirement: 5% (minimum)
- LMI: Waived
- Eligibility: All first home buyers, regardless of income or marital status
- Property Type: New or established, within existing regional price caps
- Place Limits: None (the scheme is now uncapped)
This policy shift is not a temporary pilot.
It is a nationwide guarantee, backed by the full legislative weight of Labor’s election mandate.
Official Scheme Breakdown – Albanese Government Table
Albanese Government’s official media release (April 2025):
| Region | New Property Price Cap |
| NSW – capital city/regional centre | AUD 1,500,000 |
| NSW – other | AUD 800,000 |
| VIC – capital city/regional centre | AUD 950,000 |
| VIC – other | AUD 650,000 |
| QLD – capital city/regional centre | AUD 1,000,000 |
| QLD – other | AUD 700,000 |
| WA – capital city | AUD 850,000 |
| WA – other | AUD 600,000 |
| SA – capital city | AUD 900,000 |
| SA – other | AUD 500,000 |
| TAS – capital city | AUD 700,000 |
| TAS – other | AUD 550,000 |
| ACT | AUD 1,000,000 |
| NT | AUD 600,000 |
These updated limits significantly increase purchase power for eligible first home buyers and alter market access across major and regional centres.
Comparison: Labor’s Scheme vs All Current Grants & Incentives (May 2025)
| Scheme | Deposit Required | Government Support | LMI Waived? | Income Cap | Relationship Rules | Coverage |
| Labor’s 5% Deposit Guarantee | 5% | LMI waived (no cash) | Yes | None | None | Nationwide, uncapped |
| First Home Owner Grant (NSW) | 5%+ | $10,000 (new homes only) | No | None | None | NSW only |
| Stamp Duty Exemption (VIC) | 5%+ | Full exemption < $600k; concession < $750k | No | Yes | No | VIC only |
| Help to Buy (Federal Shared Equity) | 2%+ | Up to 40% equity contribution | Yes | $90k (single), $120k (couple) | Yes | 10,000 place cap |
| First Home Super Saver Scheme | 5%+ | Withdraw up to $50,000 from super | No | None | None | Nationwide |
| QLD First Home Concession | 5%+ | Up to ~$15,925 stamp duty exemption | No | None | None | QLD only |
| SA First Home Owner Grant | 5%+ | $15,000 (new homes only) | No | None | None | SA only |
| WA First Home Owner Grant | 5%+ | $10,000 + stamp duty discounts | No | None | None | WA only |
What This Means for Investors
With no caps on eligibility or places, first home buyer activity will expand into markets that have long been dominated by investors.
Sub $1.5m segments, especially in Sydney, Melbourne, Brisbane, and ACT, will face intensified pressure.
Investor Implications:
- Entry Level Stock Under Pressure: Price growth likely in FHB targeted brackets
- Owner Occupier Competition: More demand for established homes under $1m~$1.5m
- Rent to Own Conversions: Reduced rental pool as FHBs exit tenancy
- Repricing of Fringe Stock: Growth in outer metro areas now within reach of subsidised demand
Macro Drivers: Why This Is a Structural Change
- RBA Direction: Further rate cuts likely early mid 2026 may amplify already growing demand
- Migration: Population growth driven by strong immigration (>300,000/year)
- Construction Shortfall: Persistent dwelling approval deficit
- State Level Friction:
- NSW: Density reform push
- VIC: Rental regulatory tightening
- QLD: SEQ infrastructure boom
Investor Strategy for 2025–2026
With the policy locked in and operational from January 2026, investors must pre emptively position ahead of Q4 2025 activity.
Recommended Moves:
- Avoid FHB Target Zones: Prices will be bid up
- Shift to Mid Market or High Yield Regional: Seek underserved rental markets
- Land Banking & Duplexes: Capture buyers below regional caps
- De risk through Asset Class Diversification: Spread exposure beyond entry level houses
Conclusion
This is no longer a proposed policy, it’s legislated, uncapped, and significantly expanded.
With new price caps as high as $1.5 million, first home buyer power is being structurally repositioned.
Investors must now adjust strategy to compete in an increasingly owner occupier led market.
Next Step: Speak With a Strategic Property Advisor
At Rising Returns we specialise in helping investors navigate market cycles with precision.
Whether you are planning your next portfolio move, assessing property purchases, or reviewing your buyer’s agency agreement, our team can help you make the right decisions in a fast shifting market.
📞 Call us now or book a strategy session online to take advantage of this new policy landscape before competition intensifies.
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