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Young buyers poised for a comeback as 5% First Home Guarantee takes effect
Invest
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young Australians. According to exclusive data released by Aussie Home Loans, the program could significantly alter the dynamics of first-home buying, making it more accessible for younger demographics who have long been sidelined by soaring property prices.
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young Australians. According to exclusive data released by Aussie Home Loans, the program could significantly alter the dynamics of first-home buying, making it more accessible for younger demographics who have long been sidelined by soaring property prices.
The data reveals a notable shift in the age demographics of first-home buyers (FHBs) over the past two decades. In 2005, 26% of first-home buyers were under the age of 20. Fast forward to 2025, and that number has plummeted to a mere 0.5%, reflecting the growing challenges young people face in entering the housing market. However, the introduction of the First Home Guarantee, which allows buyers to enter the market with just a 5% deposit and without the burden of Lenders Mortgage Insurance (LMI), is set to reverse this trend.
Alya Manji, an Aussie Broker and media commentator, highlighted the significance of these changes: "For many Australians - especially young people - the dream of owning their first home has seemed out of reach for decades. The challenge of saving for a deposit is also cross-generational, many first-home buyers struggle to save for years chasing the ‘perfect’ deposit while trying to keep up with market growth, ending up paying a ‘waiting tax’ as prices run away."
The data from Aussie Home Loans also shows a shift in the age at which people are buying their first homes. The proportion of FHBs aged between 35 and 40 has increased from 19% in 2005 to 21% in 2025. Similarly, those over 45 now make up 10% of FHBs, a significant rise from just 2% two decades ago. Meanwhile, the 25–30 age group remains the largest cohort, though their share has slightly decreased from 28% in 2005 to 30% in 2025, indicating a stabilisation rather than a decline.
The introduction of the First Home Guarantee is expected to bring timelines forward for thousands of potential homeowners. "The changes to the First Home Guarantee – 5% deposit and no Lenders Mortgage Insurance – are set to bring timelines forward by years, and could mean thousands can get their hands on keys sooner," Manji explained. "In the long run, it is much better to own a first home sooner, rather than waiting and watching the market become more out of reach."
To assist potential buyers in navigating this new landscape, Aussie Home Loans has launched a First Home Guarantee Calculator. This innovative tool is designed to help buyers determine what they can afford with a 5% deposit by factoring in additional costs such as stamp duty. It also suggests suburbs within their budget through the Aussie Property Search feature.
Manji emphasised the importance of realistic financial planning for first-home buyers: "For FHBs, the smart move now is to get a tailored assessment early, understand true borrowing capacity and line up pre‑approval. Having an early assessment and knowing their financial reality helps to navigate the market, and avoid the pitfalls of unrealistic expectations, missed opportunities, prolonged searches, and the risk of overpaying or buying a property that leaves them with little financial buffer."
The calculator aims to shift buyers from idealistic to realistic expectations, ensuring they make informed decisions about affordability. "Because there are so many areas to search, many affordable suburbs are overlooked," Manji noted. "The First Home Guarantee Calculator puts affordable suburbs on the shortlist. With the Calculator, first-home buyers can make informed decisions about affordability to start their property journey sooner and work towards their dream home."
The changes, effective from 1 October, are expected to significantly lower the barriers to entry for first-home buyers. By enabling more Australians to purchase a home with a minimal deposit and without the additional cost of LMI, the First Home Guarantee could herald a new era of homeownership for younger Australians, making the dream of owning a home a tangible reality once more.
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