Ray White Group’s analysis reveals that house prices in the bottom quartile have climbed 34 per cent since early 2023, reaching $711,000 nationally, compared to the median’s 27 per cent rise and the upper quartile’s 25 per cent increase.
“This momentum is expected to accelerate with the removal of income caps and the lift in price thresholds under the expanded five per cent deposit scheme,” Atom Go Tian, Senior Data Analyst at Ray White Group said.
Mr Tian said that the recent policy changes represent a fundamental shift in market accessibility for first-time buyers.
“Previously, the scheme was limited to single buyers earning under $125,000 or couples earning under $200,000, with property price caps that excluded much of the available stock in major cities,” he said.
“The removal of income caps in November 2024 opened the scheme to a far broader cohort of buyers, while the increase in price thresholds to match the median house prices of capital cities brought a significant share of the market back into reach.”
According to Mr Tian, these changes have clear implications for the market.
“Lower upfront costs, faster pathways to ownership, and concentrated demand at the affordable end where stock is already limited.”
Data from Loan Market Group shows a steady increase in first home buyer activity, with the 12-month rolling count of loans lodged by first home buyers growing 14 per cent from mid-2023 to mid-2024.
“The initial recovery in 2023 was driven by improving sentiment following the peak of the rate-hiking cycle, easing rental affordability pressures that made ownership comparatively more attractive, and a gradual stabilisation in household finances,” Mr Tian said.
He said that after stabilising around 39,000 through April 2025, activity lifted sharply in recent months following the October 1 changes to the deposit scheme.
By November 2025, the rolling count had reached 41,748, representing a year-on-year increase of 7.7 per cent and the highest level in over two years.
The outperformance of affordable housing has been consistent across all major Australian cities, with Perth leading the charge.
“Perth saw affordable prices rise 17.5 per cent over the year, while Brisbane recorded 15.5 per cent and Adelaide 12.8 per cent,” Mr Tian said.
“In every major city, the affordable tier has outpaced both the median and upper quartile, underscoring the demand created when first home buyer incentives collide with limited stock at the entry level.”
Mr Tian said that the expanded scheme has fundamentally changed the equation for first home buyers.
“The question is no longer about whether first home buyers can enter the market but how fast they can act.
“For first home buyers, the window is open, but the trade-off is clear: easier access to finance, but stronger competition for the limited stock that qualifies.”
