UPDATE: Home buyers across Australia are in an uproar as the government’s new 5% deposit scheme has reportedly led to an astonishing surge in housing prices, with reports of homes increasing by $100,000 overnight. This controversial policy, introduced on October 4, 2025, has ignited widespread anger and frustration among young Australians seeking to enter the housing market.
The Albanese government’s initiative allows first home buyers to purchase properties with only a 5% deposit, a significant reduction from the traditional 20%. However, just two days after its launch, critics are saying it has exacerbated the already critical housing crisis, particularly in capital cities flooded by mass migration.
Young Australians, already grappling with soaring living costs, are expressing deep concern over the implications of this policy. Social media is buzzing with anger as many feel they have been unfairly pushed out of the market. One frustrated homebuyer remarked, “After saving for years, I feel like my dreams of homeownership have been shattered by a government policy that was supposed to help.”
Senator Pocock has condemned the scheme, stating, “These are predatory prices. They’re not being driven by demand, they’re driven by speculation.” He emphasized that this initiative appears to favor wealthy property investors rather than genuine first home buyers.
The housing crisis is further intensified by the influx of over 100,000 visa overstayers in recent months, which has put additional strain on the housing market. Critics argue that instead of easing demand, the government is making the situation worse by encouraging young buyers to take on loans they may not be able to sustain. Economic experts warn that this could lead to a government-guaranteed housing bubble that is perilously close to bursting.
The Labor Party has defended the policy, describing it as a crucial step towards addressing the housing affordability crisis. However, many believe the reality is far from their optimistic forecasts. Initially, Labor projected that the new scheme would only increase house prices by 0.5% over six years – a prediction now widely viewed as unrealistic.
The impact of these rising prices is palpable. As housing costs soar, so too do rental prices, leaving many young Australians feeling trapped in a cycle they cannot escape. Economists are raising alarms about the potential for a wave of defaults if homebuyers can’t manage their repayments amid rising interest rates.
With mounting pressure on the Albanese government, the call for a pause on migration and a reassessment of housing policies is growing louder. Advocates argue that without addressing the root causes of the crisis, including the rampant speculation in the housing market, the situation will only worsen.
As the debate heats up, the future of housing in Australia hangs in the balance. Young people are left wondering what their options are in a market that seems increasingly out of reach. The urgency of the situation calls for immediate action from policymakers to restore balance and trust in the housing market.
Stay tuned as this developing story unfolds, and keep an eye on how this policy may continue to shape the housing landscape in Australia.
