This scheme will enable all first-time buyers to purchase property with a mere five percent deposit, the government stepping in to secure the remainder. This development is anticipated to increase market accessibility for new buyers.

It’s set to kick off on Wednesday, October 1.

But the Real Estate Buyers Agents Association of Australia has warned of potential adverse effects on the market.

Melinda Jennison, president of REBAA, noted a considerable surge in prices in numerous areas over the past month. This increase stems from buyers’ anxiety regarding the ramifications of the scheme on the market.

“Properties that were selling for $750,000 last month are now selling for close to $800,000,” Jennison said.

“Many buyers are reportedly panicking with some purchasing sight unseen or overpaying to secure a property before 1 October.”

Jennison appreciated the government’s effort to facilitate first-time buyers entering the market. However, she emphasized that without an increase in housing supply, additional demand could exacerbate market inflation.

She cautioned, “A property once valued at $800,000 could soon escalate to $900,000, making it harder for first-time buyers to secure a home loan, even with the scheme’s five percent deposit option available.”

“Markets are already in frenzy, let alone what the next few months will bring once the scheme has started.

Jennison advised prospective buyers to remain composed, adhere to their budget limits, and consult professional buyers’ agents. This ensures they avoid overpaying driven by the fear of missing out on opportunities.