HGS 5% Scheme Lands: More Buyers, Same Bricks — What It Means for the Sunshine Coast
By Leigh Martinuzzi | Martinuzzi Property Group – eXp Australia
Last week, I shared an article unpacking the latest updates to the Home Guarantee Scheme (HGS) and what they mean 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 go deeper — because while the changes open new doors for home ownership, they also come with a sharp edge. The new scheme is a double-edged sword.
The expansion of the Home Guarantee Scheme allows more first-home buyers to purchase with only a 5% deposit and no Lenders Mortgage Insurance. It’s great news for buyers trying to get a start, but it also means more competition for a limited number of homes.
For the Sunshine Coast, where the new price cap is $1,000,000, the impact will be immediate. Buyers can afford more, but they’ll also pay more. We’ve seen this pattern before — when the government boosts buying power without increasing supply, prices rise to meet that new demand.
This week’s official rollout removed income caps and introduced unlimited places for eligible buyers. That’s a major shift. Lenders are already competing for new clients, and buyers are rushing to act before prices move further.
Prices Rise Again as Demand Builds
The latest data shows the market was already gaining momentum before the scheme’s launch. National dwelling values rose in September — Cotality reported a 0.8% gain, while PropTrack recorded a 0.5% lift. These are the strongest monthly increases since late 2023.
That growth has continued into October. Listings remain below average, and active buyers are chasing fewer available homes. The combination of low supply and strong demand is once again pushing prices higher.
Auction Results Show Confidence Returning
Auction markets are another sign of growing confidence. According to Property Update’s National Weekly Auction Report (Oct 4, 2025), the national clearance rate was 70.6%, matching the week prior and well above last year’s average.
Breaking it down: Sydney cleared 77.4%, Melbourne 72.4%, and Brisbane 49.5%. REA Group also reported that rolling four-week averages for auction clearances are the highest they’ve been in years — up about nine percentage points in Brisbane and Melbourne compared to this time last year.
It’s a clear sign that buyers are feeling confident and ready to move again.
Consumer sentiment has also edged higher, sitting at 86.3 on the latest Roy Morgan confidence index. It’s still below the long-term average but moving in the right direction.
As Michael Yardney highlighted in his October analysis of the RBA Chart Pack, inflation is easing, unemployment remains low, and most households have significant equity buffers built up during the pandemic. These factors are helping to support the housing market through what could have been a more difficult period.
Together, they’re giving many homeowners the confidence to sell, upgrade, or reinvest — adding healthy turnover at a time when new supply is limited.
“More Buyers, Same Bricks” – Matusik’s Take
In his latest Matusik Missive, Michael Matusik captured the situation perfectly: “More buyers, same bricks.”
He argues that while the expanded Home Guarantee Scheme will help first-home buyers, it won’t fix Australia’s housing shortage. His modelling suggests the changes could bring 70,000 to 100,000 new buyers into the market over the next two years.
That extra demand could lift prices by as much as 10% in popular first-home buyer markets, especially where property values sit below $1 million.
And he raises a valid point — since when did $1 million become an acceptable entry point for first-home buyers? It’s a question that highlights just how much affordability has shifted.
While the scheme is a boost for buyers, it also adds some risk. The government now guarantees up to 15% of eligible loans. If the market experiences a correction, some first-home buyers could slip into negative equity, leaving taxpayers exposed.
It’s a calculated risk, designed to help more Australians buy sooner. But if prices soften, both buyers and the government will share the burden.
The ripple effect of this scheme extends beyond first-home buyers. Every first purchase creates a new seller — often someone upgrading, downsizing, or relocating.
That means the mid-range and premium markets also benefit. Here on the Sunshine Coast, homes between $1.1 million and $1.6 million are already seeing stronger interest. With more first-home buyers entering the market, we can expect that activity to climb.
What’s Happening on the Ground
Locally, we’re seeing higher enquiry for properties between $800,000 and $1 million. Many of these buyers are motivated first-home purchasers eager to make the most of the new scheme.
Stock remains tight, with total listings still below the five-year average. Well-presented properties close to amenities and beaches are selling quickly, often with multiple offers. Auction campaigns are also increasing for premium listings, which is a sign of confidence from sellers.
Outlook for the Sunshine Coast Market
The months ahead look positive. With prices rising, strong auction results, and improving confidence, 2025 is on track to finish strong.
Nationally, property values are forecast to grow around 6–7% this year, with the Sunshine Coast likely to outperform thanks to ongoing population growth and limited housing supply.
If construction doesn’t pick up soon, we could see this “more buyers, same bricks” scenario continue into 2026 — though possibly at a steadier pace.
The expanded Home Guarantee Scheme will help many locals finally get a start in the property market. But it’s also going to lift competition and push up prices in the most popular segments.
For Coast homeowners, that’s a welcome tailwind. For buyers, it’s a reminder to be prepared, act early, and stay strategic.
If you’d like help navigating the market — whether you’re buying, selling, or just planning ahead — I’d love to chat. I’m back on the ground after a great week at the eXp International Conference in Barcelona and ready to help however I can.
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