5% First Home Buyer Deposit Scheme Drives 22% Surge in Gen Z Buyer Demand

Equifax analysis examines the period from October 2025 - March 2026 compared to the prior corresponding period: 

• The 18-25 year-old FHB buyer cohort grew by +22.8%
• One-third of FHBs are casting a wider net to enter the property market
• Only 10.9% of relocating FHBs managed to stay in their local area, with over 80% moving to different parts of their state, and 7.1% moving interstate
• Demand for the lowest 25% of mortgage loan values grew by +11.8% nationally, significantly faster than top-tier high-value loans

SYDNEY – 20 May 2026 – The expansion of the First Home Buyers (FHB) 5% Deposit Scheme in October 2025 has triggered a notable shift to Approved Scheme Lenders, with FHB demand surging +16.4% among these lenders between October 2025 and March 2026 (compared to the prior corresponding period). 

New analysis from Equifax reveals that while demand at approved-scheme institutions soared, volumes at non-approved lenders saw a decline of -6.5% over the same six-month period.

The data highlights that Gen Z is leading the charge in mortgage demand in order to facilitate homeownership. The 18-25-year-old cohort showed the strongest increase in enquiries, surging by +22.8%. This age cohort, historically the most constrained by deposit hurdles, is proving highly responsive to policy incentives that have the potential to allow them to bypass the 20% deposit requirement. 

“Rising mortgage rates often inevitably lead to discussions about a cooling housing market, but affordability is just one factor in the broader demand, supply and price story,” said Kevin James, Chief Solution Officer at Equifax Australia.

“While demand is often driven by demographics or population growth, government policies can also have a significant effect - which is exactly what we are seeing six months into the expansion of the First Home Buyers 5% Deposit Scheme.”

“Equifax analysis of First Home Buyer trends shows the scheme has successfully boosted demand, while also identifying a changing mindset among potential FHBs. In particular, housing mobility has increased, with a good proportion of FHBs now seemingly prepared to explore outside of their local area or interstate.”

“While Gen Z buyers led the growth, FHBs aged 26-35 grew +17.4% and those aged 36-45 grew +16%. This widespread lift indicates that buyers across all age brackets are actively leveraging the policy incentive to bypass traditional deposit requirements and timelines,” said Kevin James, Chief Solution Officer at Equifax Australia.

The Affordability Migration as FHBs Cast a Wider Net
Equifax data also reveals property affordability concerns are impacting FHBs, with an increase in location consideration beyond their existing suburb, and an increase in demand for smaller loan amounts.

Equifax analysis reflects that of the FHBs who are casting a wider net to enter the market (approx one third of FHBs): 

• 81.9% are relocating out of their existing suburbs into new areas within their state
• 10% are moving, but managing to stay local within their existing suburb
• 7.1% are relocating interstate

“The data indicates that FHBs are actively searching for affordability, and while a majority are managing to stay close to home, others are exploring interstate and cross-border opportunities.”

“Of those FHBs migrating interstate, Equifax data shows the top two migration corridors nationwide consist of NSW buyers relocating to VIC (12.2%) and QLD (10.4%), which when you look at recent property prices in NSW, is unsurprising," added Kevin James.

Source: Equifax Australia

Younger demographics are also steadily increasing their market share across regional corridors, as FHBs demonstrate a strong appetite for lifestyle hubs such as Sunshine Coast, Gold Coast and Cairns.

Source: Equifax Australia

“Our analysis shows that demand among age cohorts varies by region. Areas such as Toowoomba and the Central Coast are seeing their highest growth from the 36-45 demographic, indicating that older cohorts may be targeting specific regional centres for upsizing or family relocation, while younger buyers prioritise coastal towns”. 

Lower-Quartile Demand Driving Growth 
The analysis also shows that the expanded scheme is skewing demand toward entry-level property values. Nationally, demand for the smallest 25% of loan amounts ($) grew at +11.8%, noticeably outpacing high-value loans at +9.3%. This gap is most extreme in South Australia, where growth in smaller loan sizes (+17%) is nearly double that of the largest loans (+8.8%).

While the policy stimulus has successfully driven market entry, Equifax analysis also shows that FHBs exhibit structurally higher arrears rates than non-FHBs nationally.

“While the household resilience of FHBs has been steady so far, this segment does appear to carry an elevated risk profile compared to non-FHBs,“ concluded Kevin James. 

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NOTE TO EDITORS
Equifax Consumer Credit data measures the volume of credit card, personal loan applications, Buy Now Pay Later, mortgages and auto loan applications that go through the Equifax Consumer Credit Bureau by financial services credit providers in Australia. Credit applications represent an intention by consumers to acquire credit and in turn spend; therefore, the index is a lead indicator. This differs to other market measures published by the RBA which measure credit provided by financial institutions (i.e. balances outstanding). The Australian Government 5% Deposit Scheme enables eligible first-home buyers to purchase homes with a 5% deposit without paying Lenders Mortgage Insurance (LMI). As of October 1, 2025, the scheme features uncapped spots, no income caps, and applies to new or existing homes within regional price caps.

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The information in this release does not constitute legal, accounting or other professional financial advice. The information may change, and Equifax does not guarantee its currency or accuracy. To the extent permitted by law, Equifax specifically excludes all liability or responsibility for any loss or damage arising out of reliance on information in this release and the data in this report, including any consequential or indirect loss, loss of profit, loss of revenue or loss of business opportunity.