300,000 Aussies Take up 5 Percent Deposit Scheme, but Is It Pouring Fuel on the Housing Crisis?

A government house deposit scheme has helped 300,000 people buy homes, including 48,000 non-citizens.

A sold sign on a real estate board advertising residential property in Sydney, Australia, on Aug. 1, 2017. William West/AFP via Getty Images

More than 300,000 Australians have now entered the property market via the Australian Government’s 5 Percent Deposit Scheme, but record participation is fuelling a heated debate over whether the program is helping first-home buyers or inadvertently driving up entry-level prices.

Data released this week by Housing Australia reveals that 48,000 permanent residents have utilised the scheme since eligibility was expanded in 2023.

The program saw a further surge in late 2025 after the government controversially removed buyer income caps and increased property price limits, allowing a single buyer in Sydney, for instance, to purchase a home worth up to $1.5 million with just a $75,000 deposit.

Housing Australia CEO Scott Langford hailed the 300,000-participant milestone as a “significant achievement” for social mobility.

“The team has successfully scaled the Scheme from 10,000 places in 2020 to supporting more than 300,000 Australians today,” Housing Australia CEO Scott Langford said. “Half of participants being people under 30, while half of all participants have been women.”

The Double-Edged Sword

Despite the high uptake, economists warn the scheme may be a “demand-side” band-aid for a supply-side crisis.

Peter Tulip, Chief Economist at the Centre for Independent Studies, said that while the policy solves the immediate hurdle of the deposit, it creates “serious unintended consequences.”

“I think the 5 percent deposit scheme addresses an important problem,” he told The Epoch Times.

“Deposit requirements are too high and lenders’ mortgage insurance is too expensive. Tulip this policy has turned into a ‘one-way bet.’

“Prices for entry-level homes are increasing noticeably faster than the rest of the market. While the policy benefits the lucky recipients, it is worsening affordability for others.”

Tulip argued that by encouraging low-deposit borrowing, the government encourages risky buying and borrowing and makes housing bubbles more likely.

“If prices fall, the taxpayer is on the hook. A better policy would be to relax zoning regulations that restrict supply and push up prices,” he said.

Political Backlash

The inclusion of non-citizens has also drawn sharp political criticism. One Nation leader Pauline Hanson attacked the program on social media, arguing that taxpayer-funded support should be reserved for citizens.

“Not only are they pushing up home prices for everyone, they’re getting into a home that should have gone to an Australian citizen,” Senator Hanson said.

“Enough is enough. Cut off the benefits, cut migration, ban foreign ownership, and start deporting.”

Under the current rules, permanent residents are non-citizens allowed to live in Australia indefinitely. They enjoy almost all the same rights as citizens, excluding the right to vote.

Proponents of the scheme argue that including permanent residents helps secure a stable workforce, particularly in regional areas where over 99,000 scheme participants are now based.

By the Numbers: The 5 Percent Deposit Scheme

Metric	Statistic
Total Participants	300,000+
Permanent Residents	48,000+
Regional Participants	99,000+
Demographic Split	50% Women / 50% Under 30
Max Property Cap (NSW)	$1.5 Million