Where you can buy a capital city apartment using the government's Home Guarantee Scheme and a 5% deposit

When entering the property market, it’s easy to overlook or feel overwhelmed by the government assistance available to first-time buyers. 

Depending on the state in which they live, buyers could have access to a list of schemes that may ease their entry into the property market. 

A common one is the First Home Guarantee (FHBG), which is part of the Home Guarantee Scheme and allows buyers to purchase with a 5 per cent deposit without paying lender’s mortgage insurance, potentially saving thousands in upfront costs.

The price caps for the scheme vary from $600,000 to $900,000 depending on location, which does narrow down the number of suburbs that qualify and knocks out many house options in the process.

Units, however, are far more within reach when it comes to this scheme.

Not all lenders participate in the scheme, but those who do tend to offer mortgages with a 95 per cent loan-to-value ratio and banks are reporting strong numbers of buyers utilising the government aid.

“Since 2020, as a participating lender, CBA has helped more than 23,000 customers access the property market through the Home Guarantee Scheme,” says a Commonwealth Bank spokesperson.

Beyond Bank says 14 per cent of its new lending this year has been through the Home Guarantee Scheme – an approximate loan value of $170 million.

SOLD - $556,000

G05/55 Dooring Street, Dickson ACT 2602

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“It has been really pleasing for us to be able to take part in the Home Guarantee Scheme, and through this, we have been able to help more Australians into home ownership sooner,” says Beyond Bank’s general manager of customer experience Nick May. 

According to the latest Domain House Price Report, there are hundreds of suburbs across Australia’s capital cities where the unit median price is well below the FHBG cap.

In Sydney, for instance, there are more than 100 suburbs where you can buy for a median of $900,000 or less, and half of those suburbs are within 15 kilometres of the CBD.

On a cap of $900,000 and using the FHBG scheme, buyers would need to have a 5 per cent deposit of $45,000 or less.

Andrew Kazzi of the Agency Inner West – Strathfield says there has been “a bit more activity” from buyers using the FHBG in the last couple of months, thanks to the price cap increase.

“About half of the buyers looking are probably using that scheme,” he says. “Since now people can get a price point of $850,000, the use [of FHBG] has been stronger.” 

SOLD - $610,000

208/9-13 Parnell Street, Strathfield NSW 2135

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Similarly, there are more than 100 suburbs with a median price of $800,000 or less in Melbourne where first-time home buyers can take advantage of the FHBG scheme. And most are within 10 kilometres of the CBD.

For example, places like St. Kilda have a median price of $528,000 – meaning you can get in with a $26,000 deposit. 

Local agent Jeremy Rosens of Gary Peer says there has been a “significant increase of [potential] purchasers talking to us about the government scheme and the 5 per cent scheme – more than ever before”.

“We saw a decrease [of first-time buyers] at the beginning of the year with the interest rises,” he says. “Now that the interest rate seems to be reasonably steady, it seems that buyers have come back to the market, and the majority of those are first-home buyers.”

SOLD - $638,000

8/316 Dandenong Road, St Kilda East VIC 3183

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Brisbane also has a good selection of 66 suburbs where you can buy an apartment using the FHBG scheme with a 5 per cent deposit of $35,000 or less.

Chris Pilkington of Place Estate Agents Kangaroo Point has also seen an increase in young couples taking advantage of the FHBG to enter the market.

“The last two out of five [apartments sold] have used some sort of scheme or government grant,” he says.

Previously, first-time buyers were a bit hush-hush about whether or not they were utilising government schemes to purchase property, but Pilkington says that “they are more open about using the schemes” now.

He says he has also seen an influx of new buyers looking to purchase or inspect open homes, with about 30 to 40 per cent of apartment inquiries coming from first-time buyers.

SOLD - $475,000

506/18 Duke Street, Kangaroo Point QLD 4169

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For first-time buyers in Canberra, there are 26 suburbs which have a median price of less than $750,000 and qualify for the scheme. 

If you’re looking to buy an apartment in Australia’s capital, the cheapest suburbs are Gungahlin at $450,000, Bruce at $465,000 and Belconnen at $494,000. You could enter the market with a median 5 per cent deposit of just $22,500.

In Adelaide, only 15 suburbs offer apartments that meet the $600,000 FHBG price cap.

The most affordable are Plympton at $302,500, Salisbury at $320,500 and Mawson Lakes at $330,500 – all of which are within 20 kilometres of the CBD.

For people looking to enter the property market in Perth, there are 35 suburbs where they can use the FHBG to purchase an apartment, with prices ranging from $227,500 to $542,500.

The most affordable are Osborne Park at $227,500, Shoalwater and Maylands at $260,000. At least $11,375 is needed in these suburbs to enter the property market with a 5 per cent deposit.