An expanded federal government initiative allowing those looking to buy their first property to put down a deposit of as little as five per cent will begin rolling out from October, three months earlier than its original start time of January 2026.
The deposit scheme will be eligible to all first home buyers, after previous versions had a yearly cap on the number of participants.
As part of the scheme, the government will act as guarantor and contribute the remaining 15 per cent of a deposit, allowing buyers to avoid costly lenders mortgage insurance.
The earlier start date will allow aspiring home owners to start paying off their own mortgage - rather than a landlord's - sooner, Prime Minister Anthony Albanese said.
"We're absolutely determined to do everything we can to fast-track home ownership," he told reporters in Canberra on Monday.
Price caps for eligible homes in the scheme in almost all jurisdictions have been increased.
A first home buyer looking to purchase a property at the national median price of $844,000 would only need a $42,200 deposit to get their own home.
A deposit of $75,000 would be needed for the maximum property value of $1.5 million in Sydney.
The Property Council of Australia said bringing forward the scheme will help more first home buyers bridge the deposit gap and enter the market but emphasised it needed to be met with more supply.
Housing Minister Clare O'Neil said it was fantastic to see a strong level of interest in the scheme after the Housing Australia website momentarily crashed following the announcement.
Modelling by Treasury found an extra 20,000 home buyers would access the uncapped scheme, bringing the total number using it to 70,000 in its first year.
But it will result in house prices rising 0.5 per cent faster over six years, the modelling found.
Centre for Independent Studies chief economist Peter Tulip said it was difficult to gauge the accuracy of the modelling without seeing the numbers underpinning it, but he knew of no research that would support such a low impact on prices.
Letting taxpayers underwrite low-deposit mortgages would encourage reckless borrowing, Dr Tulip told AAP.
"This is going to make housing bubbles more likely," he said.Â
Anything that allows Australians to spend more on housing than they would otherwise be able to results in more expensive housing and lower home ownership rates, said independent economist Saul Eslake.
Mr Eslake and Dr Tulip agreed building more homes was crucial to making housing more affordable.
The Albanese government has announced measures aimed at improving supply, including pausing upcoming changes to the national construction code to allow for homes to be built quickly.
The pause follows the federal government's productivity roundtable, which also led to the fast-tracking of environmental approvals for more than 26,000 homes.
But Dr Tulip said the real action in housing affordability was in zoning. He said it was disappointing the outcomes of the productivity roundtable focused on "pretty trivial" measures, rather than supporting state governments' planning and zoning reform and backing them in against local NIMBY opposition.
Opposition housing spokesman Andrew Bragg said the deposit guarantee scheme exposed taxpayers to an enormous contingent liability and would wipe out the private lenders mortgage insurance industry.
