“We discovered that it was smarter to purchase before the scheme was implemented because prices were already rising, and competition was expected to become fiercer,” Hoang explained.

“Several mortgage brokers on social media echoed this sentiment, and I observed a notable trend in the past, let’s say, three months, where property prices surged quite substantially.”

“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.”

Hoang and her fiance didn’t overpay – but she certainly felt the panic set in as October 1 drew closer.

Hoang said being a house hunter in Sydney, famously the most expensive property market in Australia, was stressful and at times confusing.

She sacrificed proximity to the CBD to find a home the couple could afford.

“There was just so many people looking, but the properties would be tiny,” she explained.

“We’d see properties listed at $900,000 or $920,000 and be astounded since they were really small and didn’t match our requirements,” she expressed.

“So, it’s very deflating.”

However, if they were currently searching for a home, Hoang mentioned they might have utilized the federal government’s initiative to purchase a place nearer to the city.

They would have calculated the risk of such a low deposit, though.

“I definitely think we would,” she added.

“The only other thing is obviously your borrowing power doesn’t change.

“So you have to be quite a high earner to be meeting that cap that they’ve put in place.”

The scheme will allow all first-home buyers in Australia to purchase a home with only a five per cent deposit instead of the usual 20 per cent.

First-time home buyers won’t have to pay lenders mortgage insurance either, potentially saving them tens of thousands of dollars.

There will be no caps on places or income limits, meaning all Australian first home buyers can apply regardless of how much they earn.

Additionally, property price limits are set to rise, aligning more closely with the typical house prices in cities nationwide, which have seen a significant increase since the pandemic.

The price cap in Sydney will rise from $900,000 to $1.5 million, in Melbourne it will go from $800,000 to $950,000, and in Brisbane it will rise from $700,000 to $1 million.

Sydney University senior lecturer Dr James Graham, a former senior economist at the Reserve Bank of New Zealand, told 9news.com.au that he expects only a small portion of Australians will truly benefit from the scheme.

He explained a five per cent deposit on mortgages nearing $1 million would mean the loan is only servicable for high-income earners.

”The only people this is really going to benefit are people who have very large incomes, but very low deposits,” he said.

“It’s not for your typical middle-income first-time home buyers.

“It’s really probably skewed to already fairly wealthy first-time home buyers.”

Graham predicts house prices will rise by around three to six per cent under the scheme, on top of the usual market appreciation.

He also expects an increased demand for homes that sit right under the $1.5 million cap in Sydney.

Investors may also be looking at snapping up homes in this price range to benefit on the uptick in competition, Graham said.

“You might expect to see a sudden jump in properties right at $1.5 million mark and a bit of a drop off in properties selling right above $1.5 million,” he added.