Stamp duty myths and market shifts: Breaking down the 5% deposit scheme

In this special crossover episode of the First Property Buyer Show, host Emilie Lauer sits down with The Adviser’s What’s Making Headlines team to discuss the expanded First Home Guarantee scheme and its impact on the Australian property market.

The revamped scheme allows first home buyers to purchase a property with just a 5 per cent deposit, removes previous income limits, and increases property value caps, making home ownership more accessible without requiring lender’s mortgage insurance.

Despite its benefits, about 31 per cent of Australians remain unaware of the scheme, and 24 per cent hold misconceptions, including the false belief that it eliminates stamp duty.

The scheme is expected to increase competition for properties, particularly in the sub-$1 million range, which will contribute to rising prices as buyers accelerate their purchase plans.

National property prices have also seen the highest monthly rise since October 2023, driven in part by limited stock and heightened demand.

With the Reserve Bank holding the cash rate at 3.6 per cent, first home buyers face both opportunities and challenges, requiring careful financial planning amid competitive market conditions.

Overall, the expanded Home Guarantee scheme is reshaping buyer behaviour, influencing property prices, and presenting significant implications for buyers and the broader housing market.