The affordable end of the market was the strongest performer since the pandemic, and 2026 is shaping up to be another year of above-market growth.
Since the beginning of 2023, house prices in the bottom quartile have climbed 34 per cent to reach $711,000 nationally, comfortably ahead of the median, which rose 27 per cent to $944,000, and well ahead of the upper quartile, up 25 per cent to $1.37 million. 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.
The policy shift represents a fundamental change in accessibility. 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. 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. The implications are straightforward: lower upfront costs, faster pathways to ownership, and concentrated demand at the affordable end where stock is already limited.
Already we are beginning to see an uplift in first home buyer activity. Loan Market Group data shows the 12-month rolling count of loans lodged by first home buyers grew steadily from mid-2023 to mid-2024, rising 14 per cent as buyers returned post-pandemic. 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 as inflation expectations began to moderate. Activity then stabilised around 39,000 through to April 2025, before lifting sharply in recent months. The five per cent deposit scheme was changed on 1 October and by November 2025, the rolling count had reached 41,748, a year-on-year increase of 7.7 per cent and the highest level in over two years.
