Prime Minister Anthony Albanese’s expanded first-home buyer scheme lifted Melbourne’s price cap by $150,000, but 18 suburbs have already moved beyond the new limit. Picture: NewsWire / Martin Ollman.
Almost 20 Melbourne suburbs have moved beyond reach of first-home buyers since the Albanese government’s 5 per cent deposit scheme was expanded a year ago.
New REA Group figures reveal that typical homes in the 18 suburbs were within the $950,000 price cap for the scheme, designed to help first-home buyers get on the property ladder with a smaller deposit and avoid being stung with lenders mortgage insurance.
The government lifted the ceiling for the scheme by $150,000 in Melbourne and Geelong last October, but the new median price data shows market increases have put typical homes in those suburbs beyond reach again.
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For homebuyers hoping a unit might be a cheaper way into the market, Templestowe has delivered a $171,500 reality check, with the suburb’s median unit price jumping to $981,500 – $31,500 beyond the scheme’s cap.
The cost of a typical unit in Camberwell increased $95,000 to $995,000, while Ashwood’s median unit price surged $110,000 to $1.05m.
Botanic Ridge’s median house price has hit $1m following an $88,000 increase, with Wandin North also reaching seven figures after a $112,500 jump.
And the squeeze extends beyond Melbourne’s east, with median house prices climbing to $992,000 in Cairnlea and $990,000 in West Footscray.
Another 30 suburbs have median house or unit prices between $900,000 and $950,000, including Reservoir and Ferntree Gully, where the median price equals the scheme’s cut-off.
The figures highlight the diverging fortunes for Melbourne homebuyers, with prices in these markets rising even as the city’s broader housing market loses value.
Search Party Property founder Julian Khursigara said some Melbourne buyers were turning to rentvesting after being priced out of their preferred suburbs, but the strategy would exclude them from the federal guarantee.
Search Party Property founder and Alba partner Julian Khursigara said some first-home buyers were giving up on searching in their preferred suburbs, while others were delaying their plans amid interest rate and employment uncertainty.
He said saving enough for a deposit wasn’t necessarily the biggest obstacle, with buyers confronting the prospect of moving up to two hours from their workplaces to afford a home as fuel prices surged.
Mr Khursigara said the compromises were encouraging some buyers to consider rentvesting, where they continued renting in their preferred location while purchasing an investment property elsewhere.
However, buyers pursuing that strategy won’t qualify for the federal first-home buyer scheme.
Margin Finance director Damian Medici warned that the government’s first-home buyer scheme was making larger mortgages easier to access without necessarily making housing more affordable.
Margin Finance director Damian Medici said the government had made it easier for first-home buyers to borrow more without addressing the underlying cost of housing.
“They haven’t made it more affordable,” Mr Medici said.
“They’ve made it easy to take on bigger mortgages, definitely.”
A buyer purchasing at Melbourne’s $950,000 scheme limit with the minimum 5 per cent deposit would still need a $902,500 mortgage, before other buying costs.
Mr Medici warned that buyers committing to larger loans were particularly exposed to rising interest rates, with another potential increase delivering a “complete kick in the guts” for those entering the market.
He argued lifting the scheme’s price ceiling had contributed to higher prices in some markets, although the latest figures do not establish how much of the growth was caused by the policy.
ABN Group Victoria managing director Aidan Hooper (left) with Jeyakaran Karnan, Shree Harini Vinothkumar and their 18-month-old son Yaalan Karan. Mr Hooper said his company’s house-and-land packages started at about $450,000, less than half Melbourne’s first-home buyer scheme limit.
ABN Group Victoria managing director Aidan Hooper said the scheme was genuinely helping first-home buyers, particularly those prepared to consider newly-built homes.
Mr Hooper said his company’s house-and-land packages started at about $450,000, less than half Melbourne’s scheme limit.
He said prices for the builder’s packages had remained relatively stable over the past year.
The bigger obstacle was buyer confidence, with job security and the prospect of higher mortgage repayments weighing heavily on purchasing decisions, Mr Hooper said.
Under the scheme, eligible buyers can purchase a home with a deposit as low as 5 per cent without paying lenders mortgage insurance, provided they meet lending requirements.
But the property’s purchase price and lender-assessed value must remain within the government’s cap.
Melbourne suburbs pushing beyond the $950,000 first-home buyer cap
| Suburb | Property | 2026 median | Price rise | Growth |
| Templestowe | Units | $981,500 | $171,500 | 21.20% |
| Wandin North | Houses | $1,010,000 | $112,500 | 12.50% |
| Ashwood | Units | $1,050,000 | $110,000 | 11.70% |
| Camberwell | Units | $995,000 | $95,000 | 10.60% |
| Botanic Ridge | Houses | $1,000,000 | $88,000 | 9.70% |
| Cairnlea | Houses | $992,000 | $82,000 | 9.00% |
| West Footscray | Houses | $990,000 | $61,000 | 6.60% |
| Chelsea Heights | Houses | $1,008,500 | $58,500 | 6.20% |
| Lyndhurst | Houses | $985,000 | $50,000 | 5.30% |
| Knoxfield | Houses | $985,000 | $42,000 | 4.50% |
Source: REA Group. Median sale prices for the respective 12-month periods. Minimum 30 sales. Ranked by reported annual percentage growth.
Regional Victorian suburbs pushing beyond the $650,000 first-home buyer cap
| Suburb | Property | 2025 median | 2026 median | Price rise | Growth |
| East Bendigo | Houses | $522,500 | $655,000 | $132,500 | 25.40% |
| Koroit | Houses | $590,000 | $670,000 | $80,000 | 13.60% |
| Jackass Flat | Houses | $600,000 | $680,000 | $80,000 | 13.30% |
| Shepparton North | Houses | $650,000 | $732,500 | $82,500 | 12.70% |
| West Wodonga | Houses | $590,000 | $659,000 | $69,000 | 11.70% |
| Myrtleford | Houses | $600,000 | $665,000 | $65,000 | 10.80% |
| Kennington | Houses | $590,000 | $654,000 | $64,000 | 10.80% |
| Epsom | Houses | $620,000 | $686,000 | $66,000 | 10.70% |
| Alfredton | Houses | $610,000 | $675,000 | $65,000 | 10.70% |
| Huntly | Houses | $600,000 | $663,000 | $63,000 | 10.50% |
Source: REA Group. Median sale prices for the respective 12-month periods. Minimum 30 sales. Ranked by reported annual percentage growth. The $650,000 limit applies to these markets; Geelong is subject to a higher cap.
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