Housing affordability in 2026: What’s changed for first home buyers

First home buyers have had two major pieces of government support land in the past year. The Australian Government 5% Deposit Scheme was expanded in October 2025, and the new Help to Buy scheme was launched in December 2025. 

Here’s what’s actually changed and what it means if you’re trying to get into the market.

The Australian Government 5% Deposit Scheme just got a lot bigger

Since 1 October 2025, the scheme formerly known as the Home Guarantee Scheme has had no income caps and no annual limit on the number of places available. Property price caps rose sharply, too: Newcastle, Lake Macquarie, and the Central Coast now sit at $1.5 million, the same cap as Sydney, while other parts of the Hunter, including Maitland and Singleton, currently sit closer to $800,000.

Eligible first home buyers can still purchase with a deposit as low as 5% and avoid Lenders Mortgage Insurance. If you were told you didn’t qualify a year or two ago because of your income or the property price, it’s worth checking again.

Help to Buy adds a shared equity option

The federal Help to Buy scheme gives eligible buyers a genuine alternative. The government contributes up to 30% of the purchase price for an existing home or 40% for a new build, in exchange for an equivalent share of ownership, which brings your deposit down to as little as 2%.

It’s income tested, currently at $103,000 for individuals or $165,000 for couples and single parents, and you can’t combine it with the 5% Deposit Scheme. It’s also only available through a small number of participating lenders so far, so it won’t be the right fit for everyone.

NSW’s own support is still worth checking

On top of federal schemes, NSW first home buyers can still access the First Home Owner Grant, worth $10,000 for a new home up to $600,000 or a house and land package up to $750,000, and the First Home Buyers Assistance Scheme, which waives stamp duty entirely up to $800,000 and offers a concessional rate up to $1,000,000.

These often stack with the federal schemes above.

What this means if you’re saving for a deposit right now

More first-home buyers are getting into the market on the back of these changes. ABS data shows first home buyer loan numbers rose 6.8% in the December 2025 quarter, the largest jump since 2023. With more support available than there’s been in years, the harder question for most buyers isn’t whether help exists; it’s which combination of schemes actually suits their situation.

That’s where we come in. Contact our team online, give us a call, or book a free 15-minute Discovery Call to chat ASAP. We’ll work through your options across Newcastle, Maitland, Singleton and the Central Coast.

Disclaimer

Watson Mortgages Pty Ltd (Nestor Ramirez Credit Representative Number 378816 and Gary Gilbert Credit Representative Number 432216) is authorised under Australian Credit Licence 389328. Watson Mortgages Pty Ltd ABN 29 642 538 967 is a separate entity to Elliot Watson Financial Planning Pty Ltd. Elliot Watson Financial Planning Pty Ltd is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429. This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.