Revealed: Just how many first-home buyers using 5% deposit are in negative equity

As property prices cool across the country, questions are being raised around how many first-home buyers using the 5% Deposit Scheme have fallen into negative equity.The answer is most have not - at least not yet.Since the government's 5% Deposit Scheme was expanded in October last year, some 48,000 properties were purchased using the scheme.Market downturns occur in asset markets all of the time; luckily for housing, the underlying demand for dwellings will never fall through the floor. As long as population growth exceeds or equals dwelling growth, prices will generally continue to grow over the long term.When we consider the implications of market downturns for property holders, there are several things to consider: Has the property holder borrowed to purchase the property? If yes, are they in arrears on repayments? If yes, are they in negative equity on the property?If the property holder answers yes to all three of these questions, then there is concern. If, in the worst-case scenario, that is widespread across the property market and defaults increase, then there is a major problem. That is highly unlikely, however.Analysis shows most first-home buyers who purchased recently ...