What the First Home Guarantee Changes Mean for Regional Victoria Buyers

sarah59090
Sep 5, 2025
3 min read

The 5% Deposit Shift What’s Actually Changed

From 1 October 2025, the federal government is expanding the First Home Guarantee in a few keyways:

No more income caps previously, singles had to earn under $125,000 and couples under $200,000 to qualify. That restriction is gone.
No more place limits instead of a set number of spots each year, the scheme will be open to anyone who meets the criteria.
Higher price caps in regional Victoria, the maximum eligible property price lifts from $650,000 to $750,000.
Same 5% deposit, no LMI buyers can purchase with just 5% down, with the government guaranteeing up to 15% of the loan, meaning no need to pay lenders mortgage insurance.

What does that look like in practice? For a $750,000 property, instead of saving a $150,000 deposit, you’d need just under $40,000. Stamp duty is still payable (around $40,000 at that price point for most buyers), but the barrier to entry has been slashed.

Urgency Fuels the Market

We’ve seen this movie before. Incentives drive demand, and demand drives prices. Remember COVID, when buyers flooded Bendigo and Ballarat chasing lifestyle and affordability? Prices shot up 30% in just two years.

This new policy has the same DNA. Buyers who were capped at $650k can now stretch into the $700k–$750k bracket and they’re already circling. FOMO isn’t theory. It’s a self-fulfilling prophecy.

Where the Pressure Lands

So, what actually happens when the cap shifts from $650k to $750k in regional Victoria?

It’s not going to affect $1M lifestyle blocks in Strathfieldsaye or Alfredton. But the $650k–$750k sweet spot? That’s about to go off.

Bendigo: Family homes in Strathdale, Flora Hill, and Kennington that were sitting at $680k–$720k will now be in the firing line.
Ballarat: New builds in Alfredton and Lucas priced at $700k suddenly become far more accessible.
Shepparton: Larger family homes in Kialla and Shepparton North, previously just out of reach, will draw a flood of interest.

Don’t be surprised to see $30k–$50k jumps almost overnight as buyers fight to get in before competition escalates.

The Big Picture: Demand vs Supply

Victoria welcomed 120,000 new migrants last year. Only 60,000 new homes were built. Regional areas are already under pressure with rental vacancy rates under 2%.

Add a government-backed scheme that makes it easier to buy, and the equation is simple: more buyers competing for the same small pool of properties.

Even Treasury admits it when demand rises and supply stays tight, prices climb.

The Trade-Off

There are clear upsides:

You save years of deposit-building.
You dodge tens of thousands in Lenders Mortgage Insurance (LMI).
You finally get a fair shot at buying without needing parents to bankroll you.

But here’s the flip side:

Competition intensifies.
The $650k–$750k bracket in regional towns will get crowded fast.
While buyers win on deposit savings, the state still rakes in millions in stamp duty.

Final Word

This isn’t a free ride. It’s an opportunity but only if you play it smart. The First Home Guarantee expansion will open doors for regional Victorian buyers, but it will also push prices higher in the most in-demand pockets.

If you’re planning to buy in Bendigo, Ballarat, Shepparton, or beyond, the time to prepare is now. Know your budget, know your strategy, and don’t get caught scrambling when the rush begins.

Thinking about taking advantage of the new scheme? Let’s talk strategy before you get swept up in the FOMO wave.