How Government Assistance is Shaping the Sydney and Melbourne Property Markets
Government assistance programs are having a major impact on property markets in Sydney and Melbourne, helping first-home buyers and investors enter the market with greater ease. These schemes are designed to make property ownership more accessible, but they are also influencing market dynamics and property prices, especially in entry-level segments where demand is strongest.
For participants and existing property owners, understanding these shifts and their impact on market value is crucial for making informed decisions.
Key government schemes in 2025
Several key programs are driving demand in Sydney and Melbourne, each with different eligibility rules and benefits:
Home Guarantee Scheme (HGS)
Expanded from October 2025, the HGS now offers unlimited places for first-home buyers and has removed income caps, opening it to a much wider audience. The scheme allows eligible buyers to purchase a home with a deposit as low as 5% without paying Lenders Mortgage Insurance (LMI).
Property price caps have been substantially increased to reflect market realities:
Sydney: $1.5 million
Melbourne: $950,000
Help to Buy Scheme
This national shared equity scheme allows eligible buyers to purchase a home with a deposit as low as 2%. The government contributes up to 40% of the purchase price for a new home (or 30% for an existing home) in exchange for a corresponding stake in the property. Applications are expected to open in late 2025, with price caps and income limits applying.
First Home Owner Grants (FHOG)
These state-based grants provide direct financial assistance for buying or building a new home:
NSW: $10,000 for new homes up to $600,000 or house-and-land packages up to $750,000.
Victoria: $10,000 for new homes valued up to $750,000.
Impact on property prices in Sydney and Melbourne
These programs are concentrating demand in the entry-level and sub-$1.5 million segments, leading to higher competition and upward pressure on prices. Suburbs in Sydney and Melbourne that offer affordability, infrastructure, and good rental yields are seeing the strongest activity.
With more buyers able to enter the market with smaller deposits, properties that were once out of reach are now accessible, intensifying competition at auctions and private sales. While this helps first-home buyers overcome the deposit hurdle, it also contributes to price growth that can partially offset the benefit.
Valuation advice for program participants and property owners
A professional property valuation is a critical tool for anyone buying, selling, or holding property in a market influenced by these schemes.
For buyers using government schemes:
A pre-purchase valuation provides an independent assessment of a property's market value, ensuring you don't overpay in a competitive environment. For shared equity schemes like Help to Buy, a formal valuation is often required to establish the property's value at the time of purchase, which determines the government's equity share.
For investors and existing owners:
In a rising market, your property's value is constantly changing. A current market valuation is essential for:
Refinancing: Accessing equity to fund further investment or renovations.
Selling: Setting a realistic and strategic sale price to maximise your return.
CGT Planning: If you're selling an investment property, a retrospective CGT valuation can establish the property's market value at a specific past date (e.g., when you first rented it out), which is crucial for calculating your capital gain accurately.
SMSF Compliance: Self-managed super funds holding direct property must report assets at market value. An independent valuation provides the objective evidence required by the ATO and your auditor.
With forecasts predicting continued price growth into 2026, staying informed about your property’s value is key to any successful investment strategy.
Our valuation services
Our certified property valuers specialise in providing API-accredited reports for all property types across Sydney and Melbourne. We offer tailored valuation services for:
Contact us today for a detailed, evidence-based report that reflects the true market value of your property and helps you make informed decisions in today’s dynamic market.
