Treasurer Jim Chalmers not worried about first home buyers in negative equity after using low deposit schemes

June 2, 2026 - 02:45

The federal government has offered young Australians what it calls a "one way bet" on entering the housing market. But for some of those who took the gamble, the odds may be about to turn sour.

Treasurer Jim Chalmers has moved to calm concerns that first home buyers who used low deposit schemes could now find themselves in negative equity. With property prices softening in several capital cities, some analysts warn that buyers who put down as little as five percent could owe more than their home is worth.

Speaking on the issue, Chalmers dismissed the notion of a looming crisis. He argued that the schemes were designed with safeguards and that most participants are in stable positions. "We are not seeing widespread distress," he said. The Treasurer pointed to low unemployment and strong wage growth as buffers that should protect most borrowers from defaulting.

However, critics note that the combination of high interest rates and falling prices creates a perfect storm for those who stretched their finances to get into the market. Unlike investors, first home buyers lack a financial cushion and are more vulnerable to a downturn.

The government's schemes, including the First Home Guarantee, have helped tens of thousands of people buy homes with smaller deposits. But as the market shifts, the question remains whether that help came with hidden costs. For now, Chalmers insists the bet is still a safe one.