As November draws to a close, it’s timely to review two major housing‑policy developments — and to assess their implications from an investment‑property perspective. While much of the media coverage centres on first‑home buyers, there are important knock‑on effects for the investor market in respect of demand, pricing and supply.
First‑home buyer support: expanded access, intensifying demand
The federal government’s scheme for first‑home buyers has been significantly broadened. From 1 October 2025, the previously limited Home Guarantee Scheme (now effectively the expanded “5 % deposit scheme”) removed income caps, eliminated waiting lists and increased property‑price caps in many major markets.
Key changes include:
– Eligible first‑home buyers can enter with a minimum 5 % deposit (the government backing a portion) and avoid Lenders Mortgage Insurance (LMI).
– Property price caps have been raised — for example Sydney’s cap increased to about $1.5 m, Brisbane’s to about $1.0 m.
– The scheme applies to existing dwellings as well as new builds (and there is no explicit selection only for new builds). It is not exclusively supporting new construction.
At the same time, independent analysts caution that while the scheme improves market access, it may further fuel demand rather than ease affordability — especially since supply remains constrained.
Implications for investors
These changes ripple across the property market in ways that investors must monitor carefully:
– Elevated competition at the entry level. First‑home buyers, with enhanced support, are likely to bid more aggressively in lower / mid‑price segments. That tends to push prices upwards in those segments. Indeed, recent data shows entry‑level suburbs are growing faster than the upper‑end in many markets.
– Better relative value in established stock. For investors, older, well‑located dwellings (which are not the explicit focus of the scheme) may offer comparatively less competitive pressure from owner‑occupiers and hence better yield potential.
– Rental‑market tightness likely rising. If more homes are owner‑occupied rather than rented, supply of rental stock remains constrained. That supports rental growth and investor cash flow in undersupplied locations.
– Caution when acquiring new or off‑the‑plan assets. Because the scheme does not exclusively focus on new builds, the premium often paid for “new” may be harder to justify if many buyers chase the same stock. Oversupply risk remains real, particularly in segments where new builds are concentrated.
Structural issue still: supply shortfall
Regardless of demand‑side policy, one enduring constraint is the supply of housing. The federal government’s target to deliver 1.2 million new dwellings remains aspirational, but industry modelling suggests the target is unlikely to be met without significant reform. When demand is stimulated (via deposit assistance) but supply remains constrained, the likely consequence is further price inflation, rather than improved affordability.
Our view at Sound Property
At Sound Property, we welcome support for first‑home buyers — enhancing access into home ownership is a positive. However, from an investor lens our focus remains on fundamentals:
– Location and scarcity matter more than being “new”.
– Building equity via sound strategy and timing matters more than relying on short‑term policy‑driven incentives.
– We favour markets where supply is tight, infrastructure is improving and long‑term drivers (population growth, employment, transport) are in play.
In essence: new doesn’t automatically mean better; some of the best value may lie in established dwellings in tightly held suburbs.
Key takeaways for investors moving into 2026
As we head toward the new calendar year, keep an eye on these themes:
– Supply remains the structural constraint — monitor factors such as development approvals, planning reform and build rates.
– Buyer demand is shifting — owner‑occupied and first‑home buyer segments are more active, especially in affordable suburbs.
– Investor selection is critical — avoid overpaying in segments where policy‑incentives are distorting pricing.
– Medium‑term strategy wins — aim for 3‑5 year growth rather than short‑term “specials” driven by policy.
Thank you for reading — if you’d like to discuss how these developments impact your portfolio strategy, we’re happy to talk.