Where first-home buyers can use the loan deposit scheme amid rapidly rising prices

First-home buyers could find it increasingly difficult to purchase property under an expanded government loan scheme that lets them buy with a 5 per cent deposit, as rapid price gains push more homes beyond the scheme’s price thresholds. 

Thousands more first-home buyers and single parents will be able to get into the property market with a smaller deposit under budget measures aimed at helping more Australians into homeownership.

In addition to 10,000 more First Home Loan Deposit Scheme places scheduled to be released from July 1, there will be 10,000 places for first-home buyers looking to build or buy a new home, the government has announced ahead of Tuesday’s federal budget.

The scheme, launched in January 2020, enables first-home buyers to purchase with a deposit as low as 5 per cent while avoiding lenders’ mortgage insurance, with the federal government acting as guarantor on the loans.

There will also be a further 10,000 places under a new Family Home Guarantee, allowing single parents to purchase a new or existing home with as low as a 2 per cent deposit. The guarantees will be released over four years, and be available to both first-home buyers and previous homeowners.

There is expected to be strong demand for the new guarantees, which come after 30,000 spots were released last year – 10,000 of which could only be used to build or buy a new home.

However, just where and what first-home buyers can purchase under the scheme is changing rapidly, with Australia’s median house price up 10 per cent to $899,509 since early last year, and prices in some pockets of our biggest cities increasing by six-figure sums.

Here’s where median prices have slipped out of reach of the scheme in some of our big cities, and where first-home buyers can look instead.

Sydney 

Sydney’s median house price climbed more than $100,000 to a record $1.3 million over the first quarter of the year, and is now up almost $150,000 year-on-year. Even the city’s median unit price of $751,038 sits above the city’s scheme threshold of $700,000 for existing homes

Suburbs such as Denham Court ($810,000), Casula ($755,000) and Camden ($721,250) in the city’s south-west, and Marsden Park ($795,000) and Blacktown ($720,000) in the west, have all seen their median house prices climb over that $700,000 threshold over the past year.

SOLD - $650,500

6/13 Moray Street, Richmond NSW 2753

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First-home buyers now need to look to suburbs like Camden South ($699,999) and Richmond ($699,000), both more than a 60-kilometre commute from the city centre.

Meanwhile, for units, suburbs such as Newtown ($765,000) and Ashfield ($700,500) in the inner west, Jannali ($750,000) in the south and Gladesville ($720,000) in the north, have all crossed over the maximum price point.

Strathfield ($700,000) and Ryde ($698,250) are now the closest suburbs to the city where the median is below the cut-off point.

SOLD - $625,000

87/1 Clarence Street, Strathfield NSW 2135

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Melbourne 

In Melbourne, where the median house price is closing in on the $1 million mark, first-home buyers can spend up to $600,000 on an existing home under the scheme.

Median prices have climbed above the threshold in the likes of Burnside Heights ($658,500) in the west and Capel Sound ($620,000) on the Mornington Peninsula, where prices jumped about 10 per cent annually.

First-home buyers have also been priced out of Clyde North ($637,500), but may have better luck in neighbouring Clyde ($596,000), or in Sunbury ($590,000) or Delahey ($590,000) in the west – which, at 20 kilometres north-west of the city centre, is the closest suburb to the CBD priced below the threshold.

SOLD - $715,000

2 Cooper Court, Delahey VIC 3037

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Las Anastasiadis, of Barry Plant Taylors Lakes, said first-home buyers looking in Delahey, where prices are up 7.3 per cent annually, could expect to find an older-style three-bedroom, two-bathroom house under the cap, but strong competition was prompting some to look further afield to the likes of Fraser Rise – a further 6 kilometres west.

First-home buyers after an apartment could still buy in the likes of St Kilda East ($586,650) and Abbottsford ($590,000), though suburbs like Collingwood ($655,000) and South Melbourne ($615,000) have gone over the cap.

Brisbane

Brisbane buyers can spend up to $475,000 on an existing home, putting plenty of suburbs in reach for unit buyers, with median prices in the inner suburbs of Toowong ($465,000), Auchenflower ($450,000), Fortitude Valley ($433,000) and Woolloongabba ($420,500) all below the price threshold.

House hunters are more limited for choice, with Brisbane’s median house price climbing 6.2 per cent over the year to $632,999, but they can still turn to the likes of Taigum ($465,250) in the city’s north, Acacia Ridge ($425,500) in the south and Strathpine ($467,250) in the Moreton Bay Region.

The nearby suburb of Petrie ($475,000) also scrapes in at the price cut off, while Clontarf ($490,000), also in the Moreton Bay Region, and Caloundra ($489,000) on the Sunshine Coast are among the suburbs where median house prices have gone over the maximum.

SOLD - $485,000

40 Hemsworth Street, Acacia Ridge QLD 4110

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Adrian Daynes of Daynes Property said he had seen strong interest from first-home buyers in Acacia Ridge, with one three-bedroom, one-bathroom house recently sold for $485,000.

“I must have had about 50 offers on that,” he said. “I’m getting an abundance of calls from first-home owners, but they’re getting shut out [of the market] by investors who are prepared to pay more.”

Hobart 

With a price cap of $400,000, first-home buyers need to look to the likes of Brighton ($385,100) and Bridgewater ($301,000), both more than 20 kilometres north of Hobart, or to the outer north-west suburb of Risdon Vale ($339,765).

Other suburbs like Glenorchy ($415,000), Claremont ($432,500) and Berriedale ($450,000) have exceeded the price cap after seeing growth of more than 10 per cent year-on-year, with Hobart’s median up 15.9 per cent annually to a record $601,567.

SOLD - $422,000

1 Mareka Street, Berriedale TAS 7011

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David Johnston of Ray White Glenorchy said first-home buyers had typically flocked to northern suburbs, such as Brighton and Claremont, but had been pushed out by rising prices. He added few were looking to purchase with the scheme.

“The price threshold is too low; most people get cut out and the way the market has been in Hobart now you can’t get anything under $450,000 [in a lot of suburbs] and even at that it’s going to need a lot of work,” he said.

Canberra

Not a single suburb in the ACT has a median house price below the $500,000 cap for existing homes, with Canberra’s house prices up almost 20 per cent year-on-year to a median of $927,577.

For apartments, up 2.8 per cent to a median of $473,304, first-home buyers could just scrape into Watson ($499,900) and the city centre ($498,000), but may have a better chance of finding a unit in the likes of Gungahlin ($342,000) or Belconnen ($415,000), about a 20-minute drive from the city centre.

$495,000

708/120 Eastern Valley Way, Belconnen ACT 2617

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