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4h ago

Australian Home Values Hit New Record as 5% Deposit Policy Kicks In

The RBA warns the housing supply shortfall will not materially ease within two years.

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Residential properties are seen near the Sydney Harbour Bridge in Sydney, Australia, March 12, 2025. REUTERS/Hollie Adams
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Analysis shows the government's new First Home Guarantee scheme could slash years off savings times — but experts warn it could come at a cost.

Overview

  • National dwelling values rose 0.8% in September to a record median of A$857,280, the fastest monthly gain in a year, with broad increases across all capitals.
  • The cash rate was held at 3.6% after three cuts this year, and lower borrowing costs have lifted buyer capacity and confidence, according to Cotality.
  • From 1 October, first-home buyers can purchase with a 5% deposit under the expanded Home Guarantee, which removes income and place limits and raises price caps.
  • Experts expect the scheme to add demand and lift prices in lower-priced segments even as Treasury modelling projects only a 0.5% rise over six years; some lenders are offering exclusive lower variable rates to participants.
  • ABS data show dwelling approvals fell 6% in August to 14,744 and national rental vacancies are at record lows, reinforcing the RBA’s view that supply constraints will persist.