Australia first-home buyers face negative equity risks

New research indicates that nearly half of recent first-home buyers in Australia are at risk of negative equity if they are forced to sell their properties in the short term. Data from realestate.com.au shows that 48 per cent of first-home buyers who purchased a home since October 2025 hold less equity in their homes than the initial deposit they paid.

REA Group economist Luc Redman noted that while most buyers are unlikely to sell within the next five years, those facing unforeseen circumstances such as unemployment or arrears could be particularly vulnerable.

According to Housing Australia, approximately 48,000 properties have been purchased via the first-home buyer 5% Deposit Scheme since October 2025. Of those, 87 households—representing less than 0.2 per cent of that specific cohort—are currently in negative equity.