First Home Buyer Schemes Drive Competition at Lower Price Points — What Non-Qualifying Buyers Need to Know

First Home Buyer Schemes Drive Competition at Lower Price Points — What Non-Qualifying Buyers Need to Know

Government first home buyer schemes are pushing more buyers into the entry-level property market, creating competitive pressure at exactly the price points that many borrowers are targeting. New research from CoreLogic reveals that scheme-backed demand is "fuelling competitive tensions at the lower priced end of the housing market."

What CoreLogic Found

CoreLogic's latest analysis shows that government-backed first home buyer assistance programs — including low-deposit schemes allowing purchases with just a 5% deposit — are channelling demand toward lower-priced properties. While this is helping eligible first home buyers enter the market, it is simultaneously driving up prices and competition in the very segment where affordability already presents the greatest challenge.

This creates a paradox: the schemes designed to improve affordability are pushing prices higher in the segments where buyers most need help.

Who Misses Out

Not everyone can access government first home buyer schemes. Common exclusions include:

• Permanent residents and some visa holders who may not qualify for all federal schemes
• Self-employed buyers whose income documentation doesn't meet standard requirements
• Buyers above income thresholds who earn too much to qualify but still struggle with deposits
• Those who've previously owned property, including migrants who owned homes overseas

For these buyers, the competition created by scheme participants is all pressure and no assistance.

The Non-Bank Alternative

Non-bank lenders like MPFG Capital operate outside the scheme eligibility framework but offer flexible pathways that banks often don't:

• Alt Doc loans for self-employed borrowers who can demonstrate income through BAS statements, accountant letters, or bank statements rather than payslips
• Higher LVR options for borrowers with strong credit profiles but limited deposits
• Income assessment flexibility that considers the true financial position of the borrower, rather than a rigid payslip-based calculation

Property Market Context

ABS data shows Australian GDP grew just 0.8% in Q4 2025, while unemployment sits at 4.3% as of March 2026. CoreLogic's April 2026 housing data shows ongoing supply constraints across multiple markets, with dwelling approvals failing to keep pace with population growth — Australia's estimated resident population reached approximately 27.7 million as of September 2025.

For buyers being outcompeted in the entry-level market, widening the search area or property type — backed by flexible non-bank financing — can open up opportunities that scheme-restricted buyers are not pursuing.

This article is informational only and does not constitute financial or investment advice. Individual eligibility for lending products depends on personal circumstances.