How Much Did the New 5% Deposit Policy Really Push Prices Up?
Hello everyone,
Over the past month, one question has dominated our inbox:
“Did the new 5% deposit policy trigger the sudden jump in property prices?”
This edition breaks down the latest Cotality market data and provides a clear, evidence-based view of what’s really driving the market.
As always, our focus is on helping you make confident, strategic investment decisions.
Which Regions Felt the Strongest Localised Impact?
Not all markets reacted the same way. The areas showing the clearest “policy-amplified acceleration” were those that were already high-demand and supply-constrained.
Sydney — strongest policy sensitivity
• Northern Beaches
• North Sydney
• Hornsby
• Eastern Suburbs
These markets have high demand and high price points; expanding First Home Buyer access simply allowed more buyers to “enter the door.”
Melbourne — particularly the Inner East
• Inner East properties below the new threshold saw +1.7%, far exceeding higher-priced segments (only +0.4%).
Regional markets showing uplift
• Wide Bay
• Central Coast
• Geelong (a tight market now amplified by policy)
Summary:
📌 The hotter a market already was to enter, the more noticeable the policy effect.
Which Cities Were Most Sensitive Overall?
Cotality’s sensitivity ranking (higher percentile = stronger policy response):
• Sydney — 88% (highest sensitivity)
• Perth — 85%
• Darwin — 85%
• Melbourne & Brisbane — 70%+ (moderate)
• Hobart & ACT — minimal response
In contrast, the lower-priced segments in VIC / WA / SA / QLD are performing near the top 3% of historical levels, driven primarily by supply-demand imbalance rather than policy.
Interestingly:
📌 NSW saw both high-priced and low-priced segments rise ~1% simultaneously, indicating the uplift was demand-driven — not merely policy-driven.
Policy Boosted “Lower-Value Segments,” Not the Entire Market
If you credit the whole market’s rebound to policy, you risk overlooking stronger forces:
✔ Rate cuts
✔ Low listings
✔ Spring transaction surge
✔ Two-year structural shift toward lower-priced segments
✔ Buyers returning to more affordable areas
What the policy actually did:
• Strengthened segments that were already performing strongly
• Made “entry-level” stock in expensive suburbs even more competitive
Most importantly:
📌 These lower-value segments are likely to remain the most resilient and active over the next 6–12 months.
🔍 One-Sentence Summary
The expanded 5% deposit policy helped — but it wasn’t the spark.
It merely accelerated strength where strength already existed.
The true driver of the market is the structural affordability shift over the past two years.