First-Home Scheme Shake-Up and Australia’s Housing Mismatch: What It Means for the Sunshine Coast
By Leigh Martinuzzi | Martinuzzi Property Group – eXp Australia
This week I came across a fascinating article from Cotality (formerly CoreLogic) that digs into how Australians are living today versus the homes we actually occupy. It paints a really interesting picture: over 60% of Aussie households are made up of just one or two people. And yet, the majority of our housing stock is still dominated by large three and four-bedroom homes. It’s a trend that reveals how the Australian dream has shifted over the years, and how our planning and housing design hasn’t quite kept up.
While unit approvals have increased slightly over the past decade (from 37% to 40%), it’s still clear that most of our homes are bigger than our lives might demand. Part of that makes sense, many couples may be planning families or need office space at home. But it also raises a very real conversation about downsizing. A lot of elderly Aussies are living in larger homes that no longer suit their needs, but thanks to stamp duty and other costs, the idea of selling and moving just isn’t financially attractive. It’s something that could be addressed with smarter incentives from government.
Meanwhile, property prices are on the move again. Across most Australian capitals, dwelling values are up 0.6% over the past month and 3.3% higher than a year ago. Auction clearance rates are climbing too, and we saw interest rates drop a few weeks back. All up, buyer confidence appears to be lifting.
But here on the Sunshine Coast, the tone is a little more cautious. There’s still good demand, but buyers are increasingly price sensitive. Rising values are pushing some out of reach, and while there are more listings hitting the market, that added choice is slightly shifting the dynamics. People are still active, but they’re taking their time.
A big development this week is the Federal Government’s decision to bring forward the expanded First Home Guarantee scheme. Originally set for January 2026, it’ll now launch on 1 October this year. And the cap in Queensland will increase from $700,000 to $1 million. This is a welcome change, it’s become nearly impossible to find anything decent under $700,000 here on the Coast. So for first-home buyers, this opens the door wider.
What does this mean? Well, with just a 5% deposit and no Lenders Mortgage Insurance required, first-home buyers will be much better placed to secure a property. We saw this type of policy pre-COVID and it had a big impact. More demand always leads to stronger price growth, so while it’s great news for buyers trying to get in, it could also make it even harder as competition intensifies.
Another report I read this week included insights from Tim Lawless (Cotality). His data from late 2024 showed just how unaffordable property has become. On average, Aussie homes now cost 8 times the median income, with forecasts to rise to 8.4 by 2026. Servicing a new mortgage takes about 50% of a household’s income, compared to just under 33% for rent. That means many are choosing to rent purely for affordability.
Historically, rate cut cycles lead to strong property price growth, think 27% national growth in 2021. This time around, the forecast is for another potential 13% increase by 2026. But affordability constraints may temper that somewhat. It’s an unusual situation: conditions are improving, but the average buyer may not be able to act on it.
One final point I wanted to touch on is a perspective I came across about Gen Z and their outlook on property ownership. There’s understandably a lot of pessimism among younger generations, home ownership feels out of reach for many. But an interesting take suggests that a generational shift is coming. As baby boomers downsize and transition out of the workforce, it could unlock both housing stock and job opportunities for younger Australians. So while things look tough now, there may be more light on the horizon than many realise.
Here on the Coast, I’m seeing all of these forces play out in real time. First-home buyers will benefit from the new scheme, but they’ll still face rising competition and stretched budgets. Sellers, particularly those sitting on family homes they no longer need, may find strong demand from buyers eager to secure what they can. And for investors, the long-term story remains strong, though cash flow may tighten.
If you’d like help navigating the market, whether you’re buying, selling, or just planning ahead, feel free to reach out.
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