First Home Buyer Opportunity Cost

Back in August, I wrote that expanding the 5% first-home buyer incentive would dramatically increase prices from 1 January, which was changed to 1 October.

I wasn't being Nostradamus.

The removal of income caps and the increase in price thresholds instantly open the door for more buyers. The impact would be immediate, and I was genuinely worried for those who didn’t prioritise in life.

I said, and still believe, that it is not the right policy shift. But whether I like it or not is irrelevant.

Cotality Data is in and shows the lowest quartile, three-month growth for Sydney at 2.4%, Melbourne at 1.3%, and Brisbane at 6.8%. You can do the numbers on a $800,000 property.

The change has effectively brought forward years of future first-home buyers into today’s market while reactivating those who gave up or parked it.

Meanwhile, those who are simply not ready are facing much higher prices every day they remain unready. The opportunity cost, to be clear, is huge.

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There is a mild misconception that the fear of higher rates will slow first-home buyers. We are not seeing that. Many are simply adjusting budgets to what they can afford.

FHBs want out of renting. Rising costs, availability, and security concerns. While parental support is stronger than ever due to housing equity, high share prices, cash, early inheritance and super balances. Investors are also buying at levels not seen since 2015, where FHBs want to buy.

That said, just because you can buy it doesn’t mean you should rush blindly. First-home buyers have a lot to learn. Borrowing structures. How to assess a good asset and compete. Many regret buying the wrong asset.

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Just this week, I helped three first-home buyers rethink their approach. One needed to stretch slightly because the price point she was targeting was super competitive, and a modest increase materially improved her options. Another was moving toward a new townhouse, but could enter the housing market by shifting to a close suburb. Another was heading further down the rentvesting path when home ownership should have been the priority.

This policy is the most powerful first-home buyer support I’ve seen. Being able to enter with 5% and avoid the lender’s mortgage insurance is crazy versus the 15–17% deposits we used to aim for.

FHB Income remains the biggest challenge, and for many, improving income via a job move, promotion or renegotiating your salary can materially change borrowing capacity and property options. Sometimes the smartest property strategy starts with your career.

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We built First Home Unlocked Podcast because this space is complex, overwhelming yet so important. It’s also why Jack Elliott, in our team, specialises in guiding first-home buyers at Alcove.

The opportunity is one I do worry many will regret missing, and while you don’t need to panic, it is wise to prioritise for many in 2026.