How the 5% Deposit Scheme is impacting the Perth market

The Australian property market was already running hot – prices jumped 0.8% in September, the strongest gain in nearly two years. Now, the federal government’s updated first home buyer scheme has only turned up the heat.

From 1 October 2025, the 5% Deposit Scheme (formerly the Home Guarantee Scheme) removed income caps, lifted price caps and made places unlimited. And not many will be surprised that this has continued the trend of homes selling within days.

Perth’s property market isn’t just holding strong, it’s thriving. Fresh data and a welcome drop in interest rates show why Perth continues to be one of the hottest markets in Australia right now.

With sellers pocketing six-figure gains and interest rates on the slide, Perth continues to outperform almost every other capital city. Whether you’re buying, selling, or simply curious about your home’s value, it pays to plug in to what’s happening on the market right now.

What changed on 1 October?

No income caps (was $125k single / $200k couple)
No LMI with a 5% deposit (government guarantees up to 15% of the loan)
Unlimited places (no quotas/waitlists)
Higher price caps — Perth metro now $850,000 (up from $600,000)

So, who benefits?

Ultimately, the scheme aims to make it easier for more Australians to get into the property market, namely:

First-home buyers targeting established houses or townhouses under $850k. That now captures a much larger share of Perth’s entry and mid-ring stock than before the cap lift.

Dual-income households above the old income limits, previously locked out, can now compete with a 5% deposit and no LMI.

Apartment buyers under the unit median (~$565k) benefit from lower deposits and LMI savings, potentially shortening time-to-purchase by years.

What about sellers?

Expect stronger buyer activity in the $500k–$850k range as mortgage pre-approvals under the new rules flow through. With listings still scarce versus last year, well-presented homes priced within the new cap should see heightened competition and shorter days on market.

Independent analysis warns that more purchasing power can add to price pressure in tight markets like Perth. Government modelling suggests a modest uplift over six years, but other analysts argue the near-term effect could be larger as buyers rush in.

Put simply: competitive segments may get more competitive.

What’s happening on the ground

Agents across Perth are reporting a noticeable lift in enquiries from first-home buyers since the policy shift. Open homes for properties priced between $550k and $800k are drawing larger turnouts, and finance-ready buyers are moving quickly to secure contracts.

The scheme’s broader eligibility means some buyers who’d been waiting for conditions to improve are now back in the game, often with more confidence and clearer budgets. For sellers, that translates into stronger buyer depth, particularly in suburbs where quality listings have been scarce.

At the same time, Perth remains one of the most affordable capital cities, even after recent gains, and continues to attract buyers from both within WA and interstate. In short: the change hasn’t flooded the market, but it’s added a new wave of motivated buyers to an already competitive landscape.

Practical takeaways

Sellers: If your likely sale price sits under $850k, conditions are primed: expanded buyer pool, low stock, and solid price momentum.

Buyers: Get pre-approval early and be offer-ready. Use the official price-cap tool and confirm eligibility with a participating lender. The 5% deposit / no-LMI combo materially reduces upfront costs – but be realistic about repayments.

Investors: The scheme is owner-occupier only, but its demand effects (particularly for affordable stock) can support values and keep rental conditions tight. Perth’s rental listings remain low by historic standards.