Demand for the government guarantee scheme is surging, new figures show.
Borrowers are flocking to the expanded deposit scheme to buy property, with the number of first home buyers accessing the scheme up almost 50 per cent in October from a year ago, according to new government data.
Figures from Housing Minister Clare O’Neil, seen by The Adviser, show 5,778 first home buyer guarantees were issued under the scheme in October 2025, 48 per cent higher than the 3,901 guarantees issued in October 2024, before the scheme was expanded.
The median purchase price of property bought under the scheme is $710,000, according to the government, below the median dwelling price of $870,000 (according to Cotality).
The government has suggested this proves the scheme is working well as a targeted program for “average” first home buyers.
However, house prices have been rising rapidly. Property values hit a national record high of $858,000 in October 2025, according to PropTrack, while separate research from Cotality showed home values rose 1.1 per cent in October, the fastest monthly gain since mid-2023.
Minister for Housing, Homelessness, and Cities Clare O’Neil commented: “We know that people are doing it really tough when it comes to housing so I’m really happy that 5,778 first homes were bought with support from the Albanese Government in October.
“This means more people paying off their own mortgage and not someone else’s.
“We made a promise to first home buyers that we would help them and that’s exactly what we’re doing.”
O’Neil has previously acknowledged the need to boost housing supply to ease price growth and said the guarantee scheme would cut the time it takes first home buyers to climb onto the property ladder.
For example, Treasury has estimated that a borrower buying a median property of $870,000 with a deposit of $43,500 would save up to nine years off the time to save for a deposit, while saving up to $35,000 in lenders mortgage insurance.
Looking ahead, Treasury estimates that 70,000 homes will be bought in the first year of the expanded scheme, 20,000 more than under the previous place cap.
However, critics of the scheme have raised concerns that the rise in demand could intensify broader affordability problems, with Reserve Bank of Australia (RBA) governor Michele Bullock saying house prices could rise in the short term as a result.
Simon Orbell, mortgage and financial adviser and head of partnerships at Smartmove Professional Mortgage Advisers, told The Adviser in October that he had seen strong demand for the scheme.
“There’s no question there’s been a surge of interest in the new Home Guarantee Scheme. We’ve run multiple webinars since the announcement, and they’ve been warmly received,” he said.
“It’s a hot topic for our clients and their parents, with plenty of discussions happening. While some lenders [were] waiting until October 1 to fully implement the changes, the early signs show this scheme is attracting strong attention across the board.”
Orbell said that potential users of the expanded scheme have been particularly interested in the removal of the means test and the ability to purchase homes up to $1.5 million.
“Previously, the scheme had limited spots, creating a rush for access, almost like people queuing outside the Apple Store for the latest iPhone knowing there were only a handful available,” he said.
Tom Uhlich, director and mortgage broker at Boss Money, warned The Adviser in September that more buyers entering the market could inflate prices.
“The obvious issue is the demand imbalance. It will bring more buyers to the sub-$1 million market chasing the same number of houses, which will push prices up,” he said.
In response to criticism, the government noted that the number of homes purchased using the scheme is small in the context of the broader housing market, meaning the expanded scheme will have a “very minor impact” on house prices.
Treasury recently flagged that house prices have risen consistently since the 1980s and claimed the expanded scheme will have a 0.6 per cent price impact on house prices after six years.
[Related: Brokers braced for action as expanded Home Guarantee Scheme launches]
