Dream to reality for first home builders and investors

Aspiring first home buyers who pay their rent consistently and on time know the money they’re paying to a landlord could easily be paying off their own mortgage. The big impediment, of course, is the never-ending challenge to save the 20% deposit required before they can even consider a lender.

For too long, home ownership has seemed like a dream from a bygone era but finally, there’s hope on the horizon with a government initiative in an effort to ease the housing crisis and assist first home buyers to enter the housing market. Interestingly enough, this is also great news for investors.

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First Home Guarantee incentive for new builds for first home buyers

Normally, home buyers need a deposit of 20% of the property value to get a home loan, and those with a smaller deposit may require Lenders Mortgage Insurance (LMI) but from 1st October 2025 the Albanese Government brings forward the start date of the First Home Guarantee. This is a game-changer for those seeking a home loan for a first home build.

Under the First Home Guarantee Scheme, Housing Australia provides a guarantee to the lender, so home buyers only need a 2% or 5% deposit (depending on the type of Guarantee). This will help home buyers to buy a home sooner, with lower upfront costs. Key eligibility criteria includes:

  • a taxable income at or below $125,000 for individuals or a combined $200,000 for joint applicants 
  • you must be a first home buyer or have not owned a property in Australia in the last 10 years (applies to both in a joint application)
  • you must buy or build a home to live in (investment properties are not eligible)

Explore the three different Guarantees on the Home Guarantee Comparisons Table or check your eligibility through the Housing Australia website using their Eligibility Tool.

If you’re in NSW, there’s more…

To help you build your first home you may also be entitled to apply for the NSW Government’s First Home Owner Grant (FHOG) – a $10,000 grant available when you buy or build your first new home. 

This grant is not applicable for established houses, unless:

  • most of the home was removed or replaced
  • the seller, builder or a tenant has not lived in the home prior to, during or after renovations
  • it is the first time the home has been sold since completion of renovations.

Your first new home can be a house, townhouse, apartment, unit or similar that is newly built, purchased off the plan or substantially renovated.

There are conditions for eligibility including:

  • you must be a first home buyer as a person, not as a company or trust; 
  • you or your spouse, partner or co-purchaser must not have previously owned a home before 1 July 2000; 
  • the purchase price of a new home must not exceed $600,000
  • whether you’re a owner builder or you choose a Comprehensive home building contract, the property value (house and land) must not exceed $750,000
  • you or your spouse must not have previously received a First Home Owner Grant in Australia. So too if you owned a home or other residential property in Australia, either jointly or separately, before 1 July 2000
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Why it makes sense to build your first home

While it can seem monumental to build your first home now is the perfect time to consider this option. With these government incentives available, the years of paying rent while saving for that deposit are reduced and funds can be funnelled straight into mortgage repayments. Upfront costs are also decreased with waived mortgage lenders insurance. Remember, your new home doesn’t have to be a three bedroom house. A townhouse or unit can be a great entry into the housing market.

Good news for investors

While investors are not eligible to apply for the Australian Government 5% deposit scheme, the good news is that there will be an increased number of buyers seeking house and land packages up to $750,000 and homes up to the value of $600,000. Savvy investors and developers will be also looking to build duplexes and multi-unit dwellings to offer eager first home buyers. With housing affordability a major issue, a variety of dwellings are in demand.

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Choosing a new home builder

Whatever your property development plan you need a new home builder who has the experience and expertise to give you strong confidence in undertaking a new build. With the belief that great design should be affordable for everyone Valley Homes offers an economical range of designs suitable for the investors or first home buyer. These can be built off the plan or customised to best suit your block.

Whether you’re a first home buyer or investor these incentives provide a unique opportunity to build a new home in NSW. Valley Homes is ready when you are. Call us today.