A comprehensive government review has found no definitive evidence linking the First Home Loan Deposit Scheme to significant increases in Australian house prices, despite ongoing debate about the program's market impact.
Treasury Analysis Reveals Complex Market Picture
The Treasury analysis, released in November 2025, examined the scheme's operation since its inception in January 2020. The review concluded there was no 'smoking gun' directly connecting the program to property price spikes that have occurred during the same period.
Under the scheme, the federal government acts as a guarantor for up to 15% of a property's value, allowing eligible first-home buyers to purchase with deposits as low as 5% without paying lenders mortgage insurance. This initiative has proven particularly valuable during a period of rapidly rising property values that have made saving for a standard 20% deposit increasingly difficult for many Australians.
Scheme Success Amid Challenging Market Conditions
Since its launch, the program has assisted more than 110,000 Australians in achieving home ownership, providing crucial support during a period of significant economic uncertainty and housing affordability challenges.
The review acknowledged that while the scheme has increased demand in the housing market, this effect has been offset by other market factors including interest rate movements, construction activity levels, and broader economic conditions. The analysis suggests that removing the scheme would likely have only a modest impact on overall property prices given the multitude of factors influencing the Australian real estate market.
The government's position maintains that the scheme remains an essential tool for supporting first-home buyers navigating one of the most challenging property markets in recent memory. Officials emphasize that the program's benefits in facilitating home ownership outweigh any potential inflationary effects on the broader market.
Broader Housing Policy Context
The findings come amid ongoing national debate about housing affordability and the effectiveness of various government interventions. The review's conclusions are expected to inform future policy decisions as the government continues to balance support for first-home buyers with broader housing market stability.
Critics of the scheme have argued that any additional demand in the market contributes to price pressures, while supporters point to the life-changing benefits for thousands of Australians who have been able to enter the property market through the program.
The Treasury analysis represents the most comprehensive examination to date of the scheme's market impact, providing valuable data for policymakers and housing market analysts alike as Australia continues to grapple with housing affordability challenges.
