Will the budget really help first home buyers? I don’t think so

May 16, 2026 — 5:01am

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Didn’t anybody drafting last week’s budget think of the 95 per cent first home buyers?

In October last year, the government pulled the trigger – three months early – on a hugely expanded Home Guarantee Scheme, which allows first homebuyers to purchase with a 5 per cent deposit and avoid expensive lenders’ mortgage insurance (usually payable below a 20 per cent deposit).

The means test and cap on numbers were abolished so that every first home buyer suddenly became eligible. At the same time, the allowable purchase price was dramatically increased, closer to the median house price in each area.

And such was the flood of first-time buyers it’s been blamed for spiking prices in that slice – the middle and below – of the market.

Cotality data show that in the six months after October, properties below the price caps rose 6.7 per cent across the country, nearly double the 3.6 per cent increase in higher-priced properties.

Of anywhere, Sydney saw the biggest price decoupling: below the cap, properties surged 4.1 per cent, while above it, they have fallen 1.1 per cent. Of course, it’s all case by case. And fast forward to now and there’s another sting in the tail of the Home Guarantee Scheme.

Any way you cut it, the winners from this budget certainly aren’t first homebuyers – no matter what the government’s advertised intention.

The government goes guarantor........

© The Sydney Morning Herald