More 5% deposit scheme home buyers fall into negative equity, but levels still remain low

As home prices continue to slide, home equity levels have dropped with them. While most homeowners have equity well into positive territory thanks to strong historical growth, negative equity among 5% deposit scheme holders has increased.With the August release of PropTrack’s Home Price Index, 480 households fell into negative equity, assuming they used a 5% deposit and had no savings in an offset account. That is equivalent to 1% of the scheme's participants and an even smaller share of first home buyers with a loan.First-home buyer home values remain mostly buoyant. Picture: Jonathan NgThis is higher than last month, where an estimated 87 first-home buyer households were in negative equity, representing 0.2% of households participating in the Federal Government’s 5% deposit scheme from its expansion on 1 October 2025 through the end of June 2026. The updated analysis highlighted the divergence in home values between capital cities, mainly Melbourne and Sydney, and regional Australia. Home values in Australia’s capital cities were down 0.3% in August, with Sydney also down 0.3% and Melbourne down 0.2%.However, regional Australia was flat, with all states except for Victoria remain...