First Home Guarantee: Eligible Home Prices 2026

A new Cotality analysis released on April 23 has found that properties eligible for the First Home Guarantee scheme rose in value by 6.7 per cent in the first six months after the scheme was expanded - nearly double the 3.6 per cent recorded for homes above the price cap threshold. If you are shopping in the scheme-eligible price band right now, you are competing in one of the hottest segments of the Australian property market.

What the Cotality data shows

Cotality (formerly CoreLogic) tracked dwelling price movements across capital cities in the period following the October 2025 expansion of the First Home Guarantee. The scheme allows eligible buyers to purchase a home with a 5 per cent deposit, with the federal government acting as guarantor on up to 15 per cent of the purchase price, which means buyers avoid paying Lenders Mortgage Insurance (LMI).

The data shows that in every capital city except Canberra, homes priced below the scheme cap grew faster than those above it:

• Sydney: eligible homes rose 4.1 per cent, compared with 1.1 per cent for non-eligible homes
• Brisbane, Melbourne, Adelaide, Perth: all showed a similar two-speed pattern, with scheme-eligible stock outpacing higher priced stock by a meaningful margin
• Canberra: the only exception, where both bands rose at the same rate of 3.6 per cent

Cotality attributes the performance gap primarily to increased buyer competition following the expansion announcement. More buyers became eligible, more competition targeted the same stock, and prices responded accordingly.

Why scheme-eligible properties are outperforming

The First Home Guarantee functions by unlocking demand. Buyers who previously needed a 20 per cent deposit to avoid LMI can now enter the market with 5 per cent. That lower barrier brings more buyers into contention for the same pool of eligible properties, and more competition in a constrained supply environment pushes prices upward.

This is a structural dynamic - not a design flaw - but it is worth understanding as a buyer. The same mechanism that helps you buy sooner also means that you are entering a price band where demand is concentrated. Several factors amplify this:

• Price cap clustering: because buyers try to stay under the cap to access the scheme, demand concentrates just below the threshold. A $900,000 cap in NSW, for example, creates a hotly contested band between $800,000 and $900,000.
• Supply constraint: Australia is building fewer new homes than required to meet demand. Over the first 20 months of the federal Housing Accord, approvals ran around 20 per cent below target. Low supply plus unlocked demand equals upward pressure.
• Anticipation effect: Cotality notes that much of the price movement occurred even before scheme expansion formally started, as buyers moved early to beat competition. That pattern is likely to repeat whenever scheme changes are announced.

What this means for first home buyers using the scheme

The First Home Guarantee remains one of the most effective tools available to first home buyers in 2026. Avoiding LMI saves $15,000 to $30,000 or more depending on your loan size and deposit. The analysis does not change that core benefit.

What it does mean is that buyers need to approach the eligible price band with a clear strategy:

• Know your cap, by state and property type. The price cap varies - $900,000 in NSW, $700,000 in QLD, $800,000 in VIC for metro areas. Knowing exactly where competition concentrates in your market helps you identify whether you are in the hottest sub-segment.
• Factor faster price growth into your timeline. If you are 12 months from being purchase-ready, eligible properties in your target market may cost more by then. Running your numbers at both current prices and a 5-7 per cent increase gives you a realistic scenario range.
• The LMI saving still outweighs the price premium in most cases. Even if eligible properties are growing slightly faster, the scheme's LMI benefit is a known, certain saving. Price growth is uncertain and affects all segments. Use the LMI Calculator to see your specific numbers.
• Pre-approval puts you in the market. In a competitive price band, conditional buyers lose to unconditional ones. Having a pre-approval in place before you start making offers is essential.
• QLD buyers face a June 30 deadline. Queensland's $30,000 First Home Owner Grant for new home contracts expires on June 30, 2026. If you are eligible, the grant is worth factoring into your budget independently of scheme competition.

How the scheme stacks with other support

The First Home Guarantee is often not the only support available. Buyers using the scheme can frequently combine it with state-based stamp duty concessions, the First Home Owner Grant, and - depending on income and property type - the Help to Buy equity scheme. The combined benefit across multiple programs can reach $40,000 to $80,000 or more in some states.

Because eligible homes are growing faster in price, the value of stacking multiple grants becomes more pronounced. Every dollar of support you can access reduces the loan size and, therefore, your exposure to rate volatility over the life of the loan.

Run the numbers

Use these tools to understand what the current scheme-eligible market means for your specific situation:

• LMI Calculator - see exactly how much LMI you would pay at your deposit level, and how much the First Home Guarantee saves you in your state
• Grant Stacker - find every grant, concession and scheme you may be eligible for in your state and stack them together to see the total support available
• Scheme Comparison Tool - compare the First Home Guarantee with Help to Buy and other federal options side by side to find the best fit for your income and deposit
• Borrowing Power Calculator - model how scheme participation affects your effective borrowing power and which price caps are within reach