Spring is always a defining season for the property market, but Spring 2025 stands out as one of the most pivotal in recent years. With the federal government’s expanded First Home Guarantee scheme taking effect from 1 October, we’re about to see a major shift in who’s buying, what they can buy, and where competition intensifies.

For investors, understanding these changes isn’t just about watching policy headlines, it’s about anticipating how new demand will reshape the market and positioning portfolios accordingly.

The Scheme That’s Supercharging First-Home Buyers

The First Home Guarantee scheme helps eligible first-home buyers purchase with as little as a 5% deposit while avoiding lenders mortgage insurance (LMI). From October, sweeping changes will broaden its reach:

• Unlimited access: no more quotas or waiting lists.

• No income thresholds: open to all buyers, regardless of earnings.

• Higher property caps :NSW - from $600k rising to $1.5m, South East Queensland from $300k to $1M

• Unified access: regional and metro guarantees consolidated into one streamlined program.

These changes aren’t just incremental. They represent a structural shift in affordability for first-home buyers and, by extension, a shift in the property market itself. 

Why Spring Matters More in 2025

According to Cotality’s September Housing Chart Data, the impact of these new rules is substantial:

• Under the old caps, only one-third of markets nationally qualified for the scheme. From October 2025, this will jump to 63.1% of markets.

• More than half of house markets (51.6%) will now qualify.

• Almost all unit markets (93.7%) will be in reach.

• In Adelaide, the number of suburbs where buyers can access the scheme leaps from just 8 to 130 - nearly half the city.

• In Brisbane, 97.5% of unit markets now fall under the cap, compared with just 36.9% previously.

This means first-home buyers will no longer be limited to outer mortgage belts or small units. Instead, they’ll have buying power in the very corridors that investors often target for growth.

2. Population Growth at Record Pace

Melbourne is once again Australia’s fastest-growing city. In the year to March 2024, Victoria’s population jumped by 183,000 people, thanks to migration and interstate arrivals.

This isn’t just a headline number. More people mean more demand for both rental properties and homes to buy. For investors, it underpins confidence that rental yields and capital growth will remain supported over the long term, regardless of short-term cycles.

This surge in demand coincides with a market already building momentum:

• Dwelling values rose 1.8% nationally in the three months to August, the strongest quarterly increase since mid-2024.

• The total value of residential real estate hit $11.7 trillion in August.

• Listing activity climbed 9.4% in August, setting the stage for an active spring selling season.

In other words: just as more stock hits the market, a record number of first-home buyers will also be ready to purchase. This spring could set the tone for price growth and competition well into 2026.  

What It Means for Investors

For investors, the expanded scheme is a double-edged sword. On one hand, increased demand from first-home buyers will put upward pressure on values in affordable growth corridors. On the other, emotional buying can push prices beyond fundamentals, creating risks for those who don’t stay disciplined.

This is why strategy matters:

• Know where fundamentals support long-term growth. Population inflows, infrastructure, and job hubs remain the true drivers of sustainable capital gains.

• Don’t compete with emotional buyers. While first-home buyers may overpay for lifestyle-driven locations, investors need to prioritise yield and cashflow to keep borrowing power intact.

• Anticipate demand shifts. More competition in the $500k–$900k range means investors must be sharper about selecting investment-grade assets in corridors where growth and rental demand remain strong.

Long-Term Fundamentals Remain Strong

Despite policy challenges like higher taxes and stricter tenancy laws, Melbourne’s fundamentals remain intact. The city is projected to reach a population of 9 million by 2050, overtaking Sydney. Billions are being poured into new transport links, hospitals, and education precincts, while Melbourne’s economy remains diverse and resilient across sectors like finance, health, and technology.

For investors, this means demand is structural, not temporary. The city’s long-term growth is powered by demographics and infrastructure, not speculation. Those who take a strategic view and invest in quality assets can expect Melbourne to continue rewarding patient investors over multiple cycles.

The Takeaway

Spring 2025 is shaping up as one of the most defining seasons for Australia’s property market. With the First Home Guarantee doubling the number of markets accessible to first-home buyers, demand is set to surge just as listings increase. For investors, this creates both opportunities and risks.