Home Guarantee Scheme Boosts Ownership, Hurts Affordability

0:00It's April 22nd. This is Sydney News Today, powered by AI. I'm Cory with the story. New research from Caltality shows Australia's home guarantee scheme, expanded on October 1st last year, is driving up prices at the lower end of the manned or by-eality housing market. Properties under the government's price caps jump 6.7% in the first six months after the change, almost double the 3.6% rise for priceier homes. Most home buyers rushed in with just 5% deposits, backed by government guarantees that skip costly mortgage insurance. Caltality's Tim Lawless calls it a short-term fix that boosts ownership but hurts affordability long-term. By pumping demand without fixing supply shortages, it's pushing entry-level prices higher, making it tougher for later buyers to break in. This trend hits most of the country, standing out sharpest in Sydney where cheap homes climbed 4.1% while others dipped 1.

1:00The government stands by the scheme, saying it helps hundreds of thousands enter the market while tackling decades-old supply issues. They know entry-level prices were already outpacing the rest anyway. Other pressures like high interest rates and investors snapping up 40% of recent loans are also crowding the low end. broader property confidence is sliding fast into early 2026, with the Australian property institutes index dropping from 7.1 to 6.1. It hikes now, top worries over supply crunches, hitting residential hardest, though housing shortages keep it afloat above neutral. Still, while Sydney and Melbourne prices ease amid caution and cost squeezes, growth holds in most other spots, leaving first-timers navigating A, trickier path ahead as rates in global jitters linger.