The Albanese government is about to pour more petrol on the already booming affordable end of the property market, with its “Help to Buy” scheme set to take applications from the 5th of December.
The launch of Help to Buy - which is aimed at helping lower-income households into home ownership - comes just two months after the First Home Guarantee scheme was expanded.
The details
Unlike the First Home Guarantee, where the Federal government merely acts as a guarantor with the bank for around 15% of a deposit and helps buyers avoid taking out expensive Lender’s Mortgage Insurance (LMI), the Help to Buy scheme sees Canberra take a direct financial stake in homes.
It’s a “shared equity” scheme, which will see the government contribute up to 30% towards the purchase price for an existing home, or up to 40% for a newly built home.
The government then maintains this equity in the property until its share is either bought out by the buyer at current market value or until the property is sold.
The buyer only has to put down as little as a 2% deposit.
The idea is to help lower-income Australian households, who would never normally be able to afford to buy their own home, get into the property market and avoid a lifetime of renting.
As the government says, “This will allow you to buy a home sooner by bridging the gap between what you can borrow and the price of a home that suits your needs, helping your deposit go further, enabling you to buy sooner.”
Only households or single parents with an annual income of $160,000 or less, or a single person earning less than $100,000 would be eligible.
Research by the Australian Housing and Urban Research Institute has found that up to half a million Australian households could be eligible for the scheme.
However, given there are only 10,000 places available each year, there’s likely to be significant competition for a spot - and also, intense pressure on the government to further expand the scheme.
"It will work for some people, but a relatively small number compared to the number who would likely want to participate in a program," the report’s author, Rachel ViforJ from Curtin University, told the ABC.
How it works
The government website for the Help to Buy scheme uses the example of a fictional man named Rob, who buys an $800,000 house with just $16,000 or a 2% deposit:
“His home purchase was structured as follows:
$16,000 deposit from Rob
$544,000 loan from his Participating Lender
$240,000 contribution from the Government
Total property value: $800,000.
From this arrangement:
Rob’s loan-to-value ratio (LVR) is 68% ($544,000 ÷ $800,000). He repays this loan over 30 years through monthly principal and interest repayments to his lender.
The Government holds a 30% equity share ($240,000 ÷ $800,000). The contribution must eventually be repaid, either through:
The amount paid will always be based on the value of the property at the time of making the payment.
By understanding these obligations, Rob knows what he needs to repay regularly to his lender, and how his long-term path to full home ownership works under the Australian Government Help to Buy Scheme.”
So far, there are only two participating lenders, Commonwealth Bank and Bank Australia.
“We know it can be challenging for first-home buyers or someone returning to the market to take that step onto the property ladder,” says Angus Sullivan, CBA’s Retail Bank Group Executive.
“That’s why we’re really pleased to be supporting the government’s Help to Buy initiative, aimed at making home ownership more accessible for more Australians.”
Effect on home prices
Before applications have even opened for Help to Buy, the Albanese government has increased the income limits and property price limits from the levels set in the original design of the scheme.
While Professor ViforJ thinks the relatively small size of Help to Buy won’t have an enormous impact on prices, she says, “It'll be those at the higher end that are closer to that income limit who will end up getting access to the loans and to the scheme."
This indicates substantial price pressure just below the property price thresholds for Help to Buy, which are close or identical to the price points for the expanded First Home Guarantee.
That suggests the lower quartile of each city or region’s property market, which have already gone into overdrive because of the First Home Guarantee scheme, are set for yet more competition.
Government figures show one in ten home purchases in October 2025 took advantage of the First Home Guarantee.
Cotality estimates the FHG scheme helped boost prices at the lower end of the property market by 1.2% in just one month.
Financial analyst Nicholas Allan is blunt in his assessment of the Help to Buy scheme.
“Yet another measure to juice the lower end of the market,” he says.
“When the government covers 30% of the cost, your buying power magically increases by 30% - we all know what that means for prices…”