{"id":844971,"date":"2026-08-06T00:06:13","date_gmt":"2026-08-06T00:06:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/844971\/"},"modified":"2026-08-06T00:06:13","modified_gmt":"2026-08-06T00:06:13","slug":"nearly-1500-properties-bought-using-first-home-buyers-5-deposit-scheme-converted-into-investments-housing","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/844971\/","title":{"rendered":"Nearly 1,500 properties bought using first home buyers\u2019 5% deposit scheme converted into investments | Housing"},"content":{"rendered":"

The government\u2019s 5% deposit scheme for first home buyers has enabled the purchase of nearly 1,500 properties that were turned into investments, new data shows.<\/p>\n

The scheme is also helping hundreds of Australians earning more than $300,000 a year, after Labor stopped excluding high-income borrowers.<\/p>\n

First-time buyers can borrow 95% of a property\u2019s value and have the government guarantee the loan, waiving costly lenders\u2019 mortgage insurance, under the scheme.<\/p>\n

Housing Australia, which runs the program, provided the data in response to a Senate estimates question on notice in June.<\/p>\n

From its launch in 2020 until May 2026, the scheme released 1,485 homes because they were converted into investment properties, the agency said.<\/p>\n

The conversions were a small proportion of the 208,000 total guarantees issued over that time.<\/p>\n

Barbara Pocock, the Greens\u2019 housing spokesperson, said the scheme was supposed to help first home buyers on lower incomes to get a roof over their heads.<\/p>\n

\u201cIt shouldn\u2019t benefit the wealthy and property investors,\u201d Pocock said.<\/p>\n

Guardian Australia asked the housing minister, Clare O\u2019Neil, whether investment purchases were undermining the scheme\u2019s intention.<\/p>\n

A spokesperson said: \u201cWhen a participant transitions out of the scheme, and the government is no longer guaranteeing their mortgage, the owner is entitled to decide what they do with their home.\u201d<\/p>\n

If buyers stop living in the property, they are no longer covered by the guarantee and must negotiate with their bank but are not forced to sell or refinance.<\/p>\n

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Bob Tasevski, a Mortgage Choice broker, said buyers would typically try to avoid being forced off the guarantee as their bank would probably charge them the unpaid lender\u2019s mortgage insurance.<\/p>\n

\u201cBanks generally wouldn\u2019t waive that unless there\u2019s a special reason for it,\u201d Tasevksi said.<\/p>\n

NAB\u2019s executive for home ownership, Lin Lu, said the bank asked customers to advise if their circumstances changed.<\/p>\n

\u201cWhen this occurs, we\u2019ll work with them to understand their individual situation and discuss the options available to them,\u201d Lu said.<\/p>\n

The government did not directly answer when asked if it could rule out the prospect of more 5% scheme buyers fraudulently renting out their purchases without notifying lenders or the government.<\/p>\n

A spokesperson said Housing Australia monitored rental listings, property datasets, participants\u2019 transaction activity and changes to addresses to ensure properties remained owner-occupied.<\/p>\n

Booming popularity<\/p>\n

The Albanese government amended the scheme so it no longer excluded high-income earners in October 2025. Since then, it had enabled more than 5,600 home purchases each month on average, compared with just over 3,400 the year before.<\/p>\n

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More than 5,000 homes a month bought with 5% deposit scheme graph<\/a><\/p>\n

Prices of homes eligible for the scheme have since risen faster \u2013 and fallen more slowly<\/a> \u2013 than the rest of the market.<\/p>\n

Guardian Australia in July revealed<\/a> one in three new participants was earning above the scheme\u2019s previous annual income caps of $125,000 for singles and $200,000 for couples.<\/p>\n

The new data shows the scheme had been used by 155 singles earning more than $300,000 and 92 couples earning over $400,000. The highest-earning recipient was a couple on more than $674,000.<\/p>\n

The treasurer, Jim Chalmers, dismissed criticism of high earners\u2019 access on the ABC on Monday.<\/p>\n

\u201cThere are some markets around the country, where people, even on relatively good incomes, have found it difficult to get a toehold in the market,\u201d Chalmers said.<\/p>\n

Participants in the scheme are in strong financial positions, with 89% ahead on their repayments, according to Housing Australia\u2019s data. They were less likely to fall behind on loans than the average homebuyer.<\/p>\n

Since the scheme began, 1,392 guarantees of the 207,000 had fallen more than 90 days behind on their loan and 436 of those were still in arrears by May.<\/p>\n

Of the 45,300 homes bought under the scheme from its expansion up to May, just two households were in arrears, a separate answer revealed.<\/p>\n

The government has only had to foot the bill on 13 defaults over the lifetime of the scheme, at a total cost of $604,537. Most of those claims emerged in the past 12 months.<\/p>\n

While rising interest rates and falling house prices have added to the risk of defaults, fewer than 1% of all home borrowers across the country<\/a> are in negative equity.<\/p>\n

Do you know more? Email luca.ittimani@theguardian.com<\/p>\n","protected":false},"excerpt":{"rendered":"The government\u2019s 5% deposit scheme for first home buyers has enabled the purchase of nearly 1,500 properties that…\n","protected":false},"author":2,"featured_media":844972,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[64,63,44],"class_list":["post-844971","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-au","tag-australia","tag-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/844971","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=844971"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/844971\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/844972"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=844971"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=844971"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=844971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}