Cotality’s analysis suggests that expectations of greater competition after the scheme’s 1 October start date may have brought forward some purchasing decisions, including from borrowers who did not need to rely on the guarantee itself.
At the same time, higher interest rates and serviceability limits appear to be steering more borrowers towards cheaper segments of the market.
“The expanded 5% deposit guarantee has sharpened demand at lower price points, with under cap markets outperforming across almost nine in 10 regions,” said Tim Lawless (pictured right), research director at Cotality.
“We’re seeing a clear shift in momentum, with buyers increasingly targeting homes that fall under the new price caps – especially in Sydney, where the value gap is most pronounced.
“This trend was already visible before the scheme’s official start on 1 October, suggesting some buyers acted early to secure properties before competition increased.”