5% Deposit Scheme for First Home Buyers: What It Means for Brisbane’s Property Market

5% Deposit Scheme for First Home Buyers: What It Means for Brisbane’s Property Market

The Federal Government’s long-anticipated first home buyer support scheme has now gone live, providing a significant shift in how younger buyers can access the property market.

From 1 October 2025, eligible first-time buyers can purchase a property with just a 5% deposit while avoiding the steep costs of Lenders Mortgage Insurance (LMI). For buyers in Brisbane’s highly sought-after Inner Western Suburbs, this change is expected to bring new energy to the market by opening doors to a wave of motivated purchasers.

At Glynis Austin Properties, we are already seeing the impact of this announcement with heightened enquiry levels and strong demand across suburbs like Paddington, Red Hill, Toowong, Bardon, and Ashgrove.

Why the 5% Deposit Scheme Matters

Traditionally, first-home buyers needed a 20% deposit to avoid LMI, a fee that can add tens of thousands of dollars to the cost of purchasing. For example, Westpac has calculated that on a $700,000 loan, LMI could amount to $30,797. This cost provides no direct benefit to buyers and is usually added to their mortgage.

Now, the Government will guarantee 15% of the loan, reducing the deposit required and removing the burden of LMI. This dramatically cuts the time it takes to save and puts home ownership within reach much sooner.

For buyers in Brisbane, the scheme allows purchases up to $1 million, bringing a large portion of the city’s premium suburbs into play. This includes areas across the Inner West of Brisbane, where well-presented family homes and character properties are in demand from both first-time buyers and upgraders.

Key Benefits for Buyers

• Buy with as little as 5% deposit

• No LMI, saving between 1% – 5% of the loan value

• Eligibility has been expanded, no longer limited to 35,000 applicants per year

• Income caps lifted beyond the previous $125,000 threshold

• Loan value caps increased, including up to $1 million in Brisbane

Government figures suggest that first-home buyers could collectively save $1.5 billion in LMI costs in the first year alone.

Impact on the Brisbane Inner West Property Market

For buyers, this creates immediate opportunities to secure homes in premium suburbs with less upfront capital. For sellers, it is a timely boost to demand, particularly as auction season gains momentum and interest rates hold steady.

Consider this: the median Australian house price is now $844,000. Under the new scheme, a buyer only needs $42,200 to enter the market. Just two decades ago, that figure represented a full 20% deposit. This highlights how significantly the market has shifted.

In Brisbane’s Inner Western Suburbs, where quality homes are tightly held and highly contested, this expanded buyer pool will add even more competitive pressure. Sellers looking to capitalise on this demand should act now while confidence and affordability align.

Speak with Brisbane’s Inner West Experts

At Glynis Austin Properties, we specialise in selling prestige and family homes across Brisbane’s Inner Western Suburbs, with a proven track record of record-breaking results. Whether you are considering selling your property or simply curious about how the new 5% deposit scheme may impact the value of your home, our team is here to provide guidance and insight.

Contact us today on 0412 804 129 to arrange a confidential market appraisal and position your property for success in this new wave of buyer activity.