On the Mid North Coast, the 5% home deposit scheme “basically drove the price up overnight”

A federal government scheme that promises to make home ownership easier for first-time buyers is likely driving the price of entry level properties higher, according to Mid North Coast real estate agents.

Melissa Schothorst of Cardow + Partners in Woolgoolga – north of Coffs Harbour – says she noticed “a huge uptick” in enquiries and sales since the scheme came into play, however, only one property purchase since October has been by a first home buyer.

She says she has "definitely" seen a surge in the price of housing, “especially in the lower end of the market”.

• “[The scheme] basically drove the price up overnight,” Schothorst told the Mid North Coaster. “The market is always going to increase, but I think the scheme is pushing it up too.” 

What happened: On October 1, 2025, the federal government’s five-year-old Home Guarantee Scheme was replaced by the 5% Deposit Scheme. 

Expanded eligibility criteria meant there would now be “no income caps, no waitlists and no Lenders Mortgage Insurance (LMI)”, the government said. It is also available to first home buyers or those who have not bought a property in 10 years.

• LMI typically costs between one and five percent of a loan amount and is generally required when a deposit is less than 20 percent of the property's value.

It also supports single parents or guardians (who do not have to be first home buyers) with at least one dependent to buy a home with as little as a two percent deposit. 

Property prices on the rise: By making homeownership easier to access for more people, the scheme is driving up competition and in some cases pushing up prices of more affordable homes.

• A new report from property data firm Cotality shows that in the last quarter of the year, cheaper homes that could be afforded through the scheme grew nationally at 3.6 percent in comparison to more expensive properties, which grew just 2.4 percent.

The local impact: In the Cundletown and Taree areas, LJ Hooker’s Justin Atkins has noticed a recent northward shift in houses priced between $500,000 to $600,000.

• “[The scheme] is driving a lot of competition within that market,” Atkins told The Mid North Coaster. “It's essentially pushing those prices up.

• “Around here in a regional area, it might [increase by] $10,000 or $20,000.”

Atkins estimates he’s seen a three to five percent increase in property prices at the entry level since the new scheme was introduced.

Helpful nonetheless: Regardless of the drive in competition, Atkins believes the 5% Deposit Scheme is still helping first-home buyers get into the market.

• “I've had a lot of first-home buyers take up that scheme. It’s been very popular in the last couple of months, so people are using it and it is helping them to purchase their property,” Atkins said. 

Increase in investors: Carlos Peters, licensee for Stone in Kempsey, says there hasn’t been an increase in first home buyers in the area since the expanded scheme was introduced. 

Instead, he’s noticed an influx of investors, especially over November and December. However, this may be an unrelated trend as only owner-occupiers can access the 5% Deposit Scheme.

• “There's investors hitting the market all over the place, and that's certainly putting pressure on prices because there's more interest in that lower end because investors are going, ‘Oh, I've got this bit of cash sitting here, I can go and do this’,” Peters said.

At the start of 2025, Peters said, about 10 percent of buyers in the Kempsey area were investors. In early 2026 he put that figure at about 45 percent.