Nearly 1,500 properties that were purchased using the federal government’s first home buyers’ 5 per cent Deposit Scheme have been converted into investment properties.
New data has shown a total of 1,485 now-investment properties were originally bought as owner-occupier homes under the first home buyers’ 5 per cent deposit scheme since its 2020 launch.
The data was supplied by Housing Australia in its response to a Senate estimates question on notice in June.
“As of 31 May 2026, there have been 1,485 guarantees released due to the property now being an investment property, and 109 guarantees released due to property no longer being the borrower’s principal place of residence,” the organisation said.
“When a property is found to have changed its loan purpose, it is released from the 5 per cent Deposit Scheme and is no longer covered by the Guarantee,” it said.
The scheme formed a major part of Labor’s pledge at the federal election last year, vowing to give all first home buyers access by scrapping income caps and raising property price limits.
The previous income caps of $125,000 were scrapped for single borrowers, and $200,000 for joint borrowers.
The intention was to level the playing field for first home buyers, enabling them to afford properties more quickly.
In its Senate response, Housing Australia also provided data showing the income levels of participants using the scheme.
The data showed it had been used by 155 singles earning more than $300,000, and 92 couples earning over $400,000, since Labor scrapped income caps last year.
A couple earning more than $674,000 were the applicants with the highest income.
The scheme, introduced under the former government, enables first-home buyers to purchase a property with a deposit as little as 5 per cent.
The government covers the remaining deposit, waiving the need for lenders mortgage insurance (LMI).
As of May this year, Housing Australia said the scheme had helped 321,141 Australians purchase their first home since it first began.
A government spokesperson said that when a participant exited the scheme, the owner was entitled to decide what to do with their own home.
“Australians who purchase a home through the 5 per cent Deposit Scheme must retain an owner-occupier status while their mortgage is guaranteed by the government,” they told REB.
Want to see more stories from trusted news sources?Make Real Estate Business a preferred news source on Google.
