The Federal Government’s 5% deposit scheme has generated a lot of interest. From a banking perspective, what are you seeing so far in terms of its impact on the market? 

It’s still early days, we’ve only had a month’s worth of data, but the initial signs are interesting. Around 10% of homes that transacted in October used the scheme, which sounds big, but first home buyers typically make up about 20% of the market anyway. So it’s definitely adding demand, but not a huge step change.

What we can see, though, is that the lower end of the market is showing the strongest growth in four years. The lowest quartile of property values had the most noticeable price uplift in October, followed by the middle segment, while the top end was fairly steady. That tells us the scheme is giving extra momentum to entry level buyers, and that pattern is consistent across all capital cities.

Are you seeing broader shifts in buyer sentiment or product type preference? 

I think we’re back to a bit of that classic FOMO; buyers can see prices moving again, even in markets like Melbourne that had been lagging. When you open the door wider for first home buyers, it becomes a bit of a race to get in.

While we don’t yet have data by product type, I’d expect most of the activity to be focused on greenfield and apartment markets rather than detached homes in the inner and middle rings. That’s where affordability aligns with the buyer segments the scheme is designed to support.

How have settlement conditions been tracking in Victoria? 

Settlement delays have been more common than outright cancellations. Developers are having to allow a bit more time as banks ask for additional documentation or updated valuations, but overall, settlements are still proceeding.

The main macro factor to watch is employment. While Victoria’s economy has lagged some other states, unemployment remains relatively low. If that holds, we expect settlement risk to keep easing, especially as confidence improves through 2026 supported by lower interest rates and stronger demand from first home buyers.

This Q&A featured in our Q3 2025 Victorian Greenfield Market Update.