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WA's First Homebuyer Scheme Driving Up House Prices

  //house-home.news-articles.net/content/2026/02/0 .. st-homebuyer-scheme-driving-up-house-prices.html
  Published in House and Home on Sunday, February 1st 2026 at 8:32 GMT by The West Australian
      Locale: AUSTRALIA

Perth, WA - February 1st, 2026 - Western Australia's First Homebuyer Scheme, intended to help residents enter the property market, is increasingly being identified as a key driver of rising house prices, according to new analysis from PropTrack. While initially welcomed as a positive intervention, experts now warn the scheme is creating an artificial 'sugar hit' that may be exacerbating affordability issues and distorting the market, particularly for those it aims to assist.

The scheme, offering shared equity assistance, has seen expansion in recent years. This expansion, coupled with strong demand, is depleting available housing stock, especially at the lower price points favoured by first-time buyers. This reduced supply is naturally pushing prices upwards, creating a challenging environment for those trying to achieve the 'Australian Dream.'

PropTrack senior economist Eleisha Rumley explains the dynamics at play: "The First Homebuyer Scheme has undoubtedly provided a helping hand to many, but that assistance is coming at a cost. It's injecting additional purchasing power into the market without a corresponding increase in housing supply, creating inflationary pressure. This is especially noticeable in the more affordable segments, making it harder, not easier, for first-home buyers in the long run."

Data from PropTrack reveals a significant upswing in property values over the past year. Perth's median house price has climbed by 14.9%, while regional WA has experienced even more substantial growth, with prices soaring by 17.7%. These figures highlight a broader trend of rapidly increasing property values across the state, but experts point to the scheme as a significant contributing factor.

Local real estate agent, Tim Fiore, corroborates these findings from the ground level. "We're seeing a huge influx of first-home buyers, and the competition is intense," Fiore reports. "The scheme is definitely fueling a sense of urgency, with buyers feeling pressured to make quick decisions before prices climb further. This creates bidding wars and pushes prices beyond what many could reasonably afford without the scheme, and even with it, the increased prices are eroding its benefit."

The analysis isn't just about immediate price increases. Concerns are mounting regarding the long-term sustainability and potential unintended consequences of the scheme. CoreLogic research director, Eliza Owen, frames the situation as a "policy experiment," stating, "While well-intentioned, the scheme carries the risk of reducing affordability for future buyers. We could see a two-tiered market emerge, where those who benefit from the scheme are distinct from those who aren't, widening the wealth gap and creating further inequities."

This two-tiered system could manifest as a situation where first-home buyers who accessed the shared equity assistance enjoy a level of homeownership unavailable to subsequent buyers who are priced out of the market. This potentially creates a cycle of disadvantage and contributes to a less equitable housing landscape.

Furthermore, the scheme's impact extends beyond individual buyers. The artificial inflation of prices could distort market signals, leading to misallocation of resources and potentially creating a bubble. When government intervention artificially boosts demand without addressing underlying supply issues, it risks exacerbating existing housing shortages and creating instability.

The debate now centers on whether the short-term benefits of the scheme - helping some first-home buyers enter the market now - outweigh the potential long-term risks of increased prices, reduced affordability, and market distortion. Policy makers are facing pressure to reassess the scheme's structure and consider complementary strategies, such as increasing housing supply through strategic planning and streamlining approval processes. Without addressing the fundamental issue of supply, interventions like the First Homebuyer Scheme may prove to be a temporary fix with lasting negative consequences. The need for a holistic approach to housing affordability is becoming increasingly urgent as property values continue to rise and the dream of homeownership slips further out of reach for many Western Australians.