# Australian first-home buyer deposit scheme risks > Live situation record from CLSTR: https://clstr.news/situations/australian-first-home-buyer-deposit-scheme-risks > Updated: 2026-08-20T04:41:28.000Z. Sources: 5. Developments: 2. Australia’s federal 5 percent deposit scheme has come under scrutiny following the removal of income caps in October 2025. Data from Housing Australia indicates that a significant portion of homes purchased under the scheme have been converted into investment properties, with some high-income earners utilizing the program. Concerns have emerged regarding the financial vulnerability of participants. Analysts previously estimated that tens of thousands of purchasers could face negative equity if house prices decline or interest rates rise. Subsequent research from realestate.com.au suggests that 48 percent of first-home buyers who entered the market since October 2025 hold less equity than their initial deposit. While Housing Australia reports that only 87 households within the specific 5 percent deposit scheme cohort are currently in negative equity, economists warn that buyers facing unemployment or arrears remain particularly at risk. ## Timeline ### 2026-08-20: Australia first-home buyers face negative equity risks Nearly 48% of Australian first-home buyers who purchased since October 2025 risk negative equity if forced to sell in the short term, according to new realestate.com.au research. 5 sources. https://clstr.news/cluster/australia-first-home-buyers-face-negative-equity-risks ### 2026-08-05: Australia's 5% Home Deposit Scheme Faces Wealthy Use and Risk Australia's 5% deposit scheme has been used by high‑income buyers and flipped into investment homes, while analysts warn thousands of low‑deposit owners face negative equity as prices fall. 2 sources. https://clstr.news/cluster/australias-5-home-deposit-scheme-faces-wealthy-use-and-risk --- Cite as: Australian first-home buyer deposit scheme risks. CLSTR, https://clstr.news/situations/australian-first-home-buyer-deposit-scheme-risks