Sydney stopped being out of reach for first home buyers in October 2025, and most people have not caught up with why.
The federal 5% deposit scheme raised its Sydney price cap from $900,000 to $1.5 million and dropped the income test entirely. Sydney’s median dwelling price is $1,244,617 and the median unit is $889,617. For the first time in years, the scheme covers most of what a first home buyer would actually look at.
What you need to buy here
At the Sydney unit median of $889,617, a 5% deposit is about $44,500. Add roughly $3,000 to $5,000 for conveyancing, inspections and lender fees. Stamp duty is nil for a first home buyer up to $800,000 and tapers out to $1 million, so at that price you would pay a partial duty.
At the house median of $1,529,308 you are just above the scheme cap, which is the line that decides a lot of Sydney purchases. Houses fell 4.6% over the quarter, so that line moves.
The numbers that decide it
- Deposit: 5% under the scheme, with no LMI. Outside the scheme you are paying LMI or finding 20%.
- Stamp duty: nil to $800,000, tapering to $1 million. On an $850,000 purchase you pay a reduced amount rather than the full bill.
- Grant: $10,000 in NSW, but new homes only, capped at $600,000 built or $750,000 house and land. In practice that means Sydney’s outer growth corridors or nothing.
- Borrowing power: lenders test you at 3 percentage points above the real rate, so a 6% loan is assessed at 9%.
Where first home buyers are actually buying
Two honest options in Sydney, and they suit different people.
A unit closer in. Sydney units sit well under the scheme cap and under the full stamp duty exemption in many suburbs. Units also fell less than houses over the past quarter, down 2.5% against 4.6%, and yield more if you ever rent it out. The trade-off is strata fees and less control over the building.
A house further out. The south west and north west growth areas are where the $10,000 new home grant is actually claimable, because they are where homes under $750,000 are still being built. The trade-off is the commute and buying into an area still under construction.
Whichever way you go, get a conveyancer onto the contract before you bid, not after.
The order to do things in
- Work out your deposit and your costs, not just your deposit.
- Get pre-approval from a lender that participates in the 5% scheme, assessed by a credit officer rather than a website.
- Check the duty and grant position at the exact price you are targeting, because both change at thresholds.
- Shop inside the number you were approved for.
If you want a shortlist of people to talk to, our Sydney mortgage broker list is the place to start, and the first home buyer loan guide covers what to look for in the loan itself.
FAQs
How much deposit do I need to buy in Sydney?
About $44,500 at the Sydney unit median of $889,617 if you use the 5% scheme, plus a few thousand for conveyancing, inspections and lender fees.
Does the government scheme cover Sydney prices?
Now it does. The cap went from $900,000 to $1.5 million on 1 October 2025, which is above Sydney’s $1,244,617 median dwelling price.
Do first home buyers pay stamp duty in NSW?
Not up to $800,000. Between $800,000 and $1 million you pay a reduced amount, and above $1 million the full bill applies.
Can I get the $10,000 NSW grant?
Only on a new home, capped at $600,000 for a built home or $750,000 for a house and land package. In Sydney that generally means the growth corridors.
Unit or house?
Units sit well under the scheme cap and under the full duty exemption in many suburbs, and fell less than houses over the past quarter. Houses give you land and control but the Sydney house median is above the scheme cap.
How much can I borrow?
Lenders test you at 3 percentage points above the real rate, so a 6% loan is assessed at 9%. Clearing credit card limits usually lifts the number more than anything else you can do quickly.
James Haywood
Financial Services Expert
James has worked with property investors since 2017, helping them scale portfolios on market data rather than guesswork — picking suburbs with room to grow, and structuring the loans around a long-term plan instead of the next purchase.
Through his Property Surfer Program, clients get their purchase structure set up before they buy, access to the market data behind the suburb calls, and automated loan repricing every three months so the rate does not quietly drift upward. Asset protection and risk sit inside the structure rather than being handled afterwards.
He works alongside a referral network across financial planning, accounting, conveyancing, family law and building inspections, so clients are not assembling a team of their own from scratch.