5% Home Guarantee Scheme: More Buyers, Same Bricks: What It Means for the Sunshine Coast
By Leigh Martinuzzi | Martinuzzi Property Group – eXp Australia
Last Monday, I published an article unpacking the updates to the Home Guarantee Scheme (HGS) outlining exactly what’s changed and what it means for Sunshine Coast buyers. (You can read that explainer here: martinuzzi.com.au/5-percent-deposit-scheme-2025-sunshine-coast/).
This week, I want to take a position because while the changes open doors, they also bring new risks. The updated scheme is a double-edged sword. It’s great news for first-home buyers who can now purchase with just a 5% deposit and no Lenders Mortgage Insurance. But it also brings more demand into an already tight market, and that means more competition and higher prices.
For the Sunshine Coast, where the new price cap sits at $1,000,000, the effect will be immediate. Buyers can afford more, but they’ll likely end up paying more too.
The double-edged sword of the Home Guarantee Scheme
The expanded scheme took effect this week. It removes income limits, adds unlimited places, and opens up opportunities for many first-home buyers. For lenders and brokers, it’s already creating strong activity.
But history shows that policies boosting buyer access often drive prices up when supply doesn’t match. More buyers chasing the same homes means higher prices and we’re seeing that trend already.
The latest data from Cotality and PropTrack confirms the market’s strength. National dwelling values rose again in September, up 0.8% and 0.5% respectively. That’s the strongest monthly growth since late 2023.
Auction activity is also improving. According to Property Update’s National Weekly Auction Report (Oct 4, 2025), the national clearance rate averaged 70.6% last week, matching the week before and well ahead of this time last year.
Sydney cleared 77.4%, Melbourne 72.4%, and Brisbane 49.5%.
REA Group reported similar results, noting that auction success rates are now the highest in several years. In Brisbane and Melbourne, clearance rates are up about nine percentage points compared to a year ago. That shows real confidence returning to the market.
Consumer sentiment has lifted slightly too. The Roy Morgan index rose to 86.3 in early October, showing that Australians are adapting to current interest rate levels and beginning to move again.
Michael Yardney, in his latest RBA Chart Pack analysis, also noted positive economic signs. Inflation continues to ease, the job market is strong, and households still have solid equity buffers. This is giving many homeowners confidence to sell and upgrade.
Matusik’s warning: more buyers, same bricks
Adding to the week’s debate, Michael Matusik summed things up succinctly in his latest Matusik Missive: “More buyers, same bricks.” He argues that while the expanded HGS will unlock access for more buyers, it won’t suddenly increase housing supply. His modelling suggests the scheme could pull forward 70,000 to 100,000 new first-home buyers nationally over the next year or two, with price increases of up to 10% expected in key sub-$1 million markets. And he raises a fair question: since when did $1 million become an acceptable entry point for first-home buyers in Australia?
That’s the crux of it. We’re now in a market where “entry-level” and “premium” are converging, especially in high-demand regional centres like ours. The government, meanwhile, has increased its financial exposure. By guaranteeing up to 15% of certain loans, it’s effectively sharing in the risk if the market softens. Should prices correct modestly, some first-home buyers could find themselves in negative equity; a scenario that would add to government liability.
The effects of the scheme will also ripple beyond first-home buyers. Every FHB purchase unlocks a sale, and those sellers often re-enter the market as upsizers, downsizers, or relocators. That cycle fuels activity at higher price points. Here on the Sunshine Coast, that likely means more buyer depth and firmer pricing for homes between $1.1 million and $1.6 million, where second-home buyers are most active.
On the ground this week, enquiry levels are already higher for homes in the $800,000 to $1 million range which is the sweet spot for first-home buyers under the new scheme. Supply remains tight, and many vendors are positioning their pricing strategies right at or just under the new cap. Properties that are well-presented and close to lifestyle amenities are attracting strong competition, and we’re even seeing a lift in local auction activity for A-grade listings.
For first-home buyers, the key is preparation. Be finance-ready early, and target price brackets where competition is slightly lower. For sellers, the months ahead look promising, particularly those positioned near the cap range, where demand will be most concentrated. And for investors, low vacancy rates (still under 1% locally) and solid rental yields continue to support long-term growth prospects.
Outlook as 2025 draws to a close
As we move into the final stretch of 2025, the outlook remains upbeat. With strong auction results, rising values, and improving sentiment, the market continues to defy broader economic headwinds. Australia is on track for roughly 6–7% price growth this year, with the Sunshine Coast likely to outperform slightly given its lifestyle appeal, limited supply, and population inflows. If construction doesn’t ramp up soon, this dynamic of “more buyers, same bricks” could well carry into 2026, albeit at a steadier pace.
The expanded HGS will genuinely help some locals finally step onto the property ladder, but it’s also going to push prices higher in already competitive price brackets. For Coast homeowners, that’s a welcome tailwind; for buyers, it’s a call to be strategic and act early.
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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