Nearly 1,500 homes bought with 5% deposit scheme later turned into rentals

Data show that almost 1,500 properties purchased through the 5% deposit first-home buyer program have been converted into investment homes, and the scheme now assists many high-income earners.

Housing Australia disclosed that 1,486 of the 208,000 mortgages guaranteed under the 5% deposit first-home buyer scheme were later used for investment purposes, representing a small fraction of total guarantees. The program, which lets borrowers obtain 95% financing with a government-backed guarantee and no lenders’ mortgage insurance, was opened to high-income earners in October 2025, leading to an average of over 5,600 monthly purchases compared with about 3,400 the previous year.

Data reveal that 155 single applicants earning more than $300,000 and 92 couples earning over $400,000 have used the scheme, with the highest-earning couple making over $674,000. Greens housing spokesperson Barbara Pocock argued the scheme should not benefit wealthy investors, while the housing minister’s office said owners are free to sell or rent once the guarantee ends. Housing Australia monitors rental listings and address changes to verify continued owner-occupation, and the government has only covered 13 defaults costing $604,537.