Why First Home Buyer Grants mean more Equity for Property Investors

Déjà vu—here we go again. Housing affordability and availability remain critical issues, yet instead of addressing the fundamental supply problem, decision-makers continue to push policies that look promising on the surface but lack the substance needed to create lasting change.

Recent announcements by the state government to increase First Home Buyer Grants have grabbed attention, promising relief for those struggling to enter the market. But while these initiatives might sound like a lifeline, history tells us a different story. Every time the government tries to “help” buyers with cash handouts, it only adds fuel to the fire.

This isn’t a demand-side problem—it’s a supply-side crisis. Giving people more money to buy homes that don’t exist doesn’t solve the issue; it just pushes prices higher, making affordability even worse in the long run. We need to stop treating the symptom and start addressing the real issue: the lack of available housing.

If we’re serious about supporting first-home buyers and renters, the focus has to be on increasing supply. More homes, more choices, and more opportunities—that’s what will actually make a difference.

The upside for those who own homes is that it creates more equity. For property investors, the larger your portfolio the greater the increase. Conversely, it does make it harder to get into the market if you haven’t yet … the best time to invest was yesterday, the next best time is today.

Grants will supercharge growth, and it was already primed

Back in 2022, we predicted the current market conditions: rising prices, interest rates set to drop by 2025, and continued growth into 2026. Initially, we thought the market might slow down slightly in 2026, but given the delayed rate cuts, that slowdown looks like it may come much later. For clarity, not only is growth set to continue, we see strong rises through to mid 2026 at least, now possibly into 2027 before growth slows. There is nothing on the horizon that suggests a reduction in home prices.

On the Sunshine Coast, property values have surged 70% in the last five years, pushing the median price to over $1 million, now pricier than Brisbane. That’s not a bubble; it’s a reflection of strong demand and limited supply. Investors and homebuyers alike are competing for a shrinking pool of properties. (We note of course this is based on the ‘median’ price, and we hate the use of medians, but that’s all we have for now to keep the commentary in line with what everyone else is reporting on).

Meanwhile, a drop in investor activity is triggering rental shortages. Less investor participation means fewer rental properties, leading to tighter markets and rising rents. This only makes it harder for renters to save for a deposit, locking more people out of homeownership.

This means more people competing for fewer rental properties, underpinning rental price growth and income for investors. So not only is equity (value) likely to increase indefinitely (at varying rates), so is the income for properties.

The answer is do more and do it better 

The answer? More homes in the right format in the right locations. We need to get smarter about how we increase supply, not following a modification of the methods that caused the crisis in the first place. How? By increasing density.

Density isn’t a dirty word; it’s the key to a better quality of life. But we’re not talking about high-rise towers like New York or the Gold Coast. The Sunshine Coast has an opportunity to create well-planned, thoughtfully designed higher density housing that gives people more options without sacrificing the region’s character. Property investors don’t want to see uncontrolled development, that undermines value as well, they want the right kind of development that sees vibrant, diverse communities that continue to be places people want to live and rent.

Consider this: New York buyers are paying $1 million for a 62m², one-bedroom apartment with no car space. Here, that same money buys a coastal three-bedroom, two-bathroom apartment with space for 2 cars and room to breathe. So to ensure ‘affordability’ we need to increase density without compromising other aspects. It’s why there has been such a significant acceptance and uptake of townhouse and terrace style homes that provide plenty of space for a range of family types while being located close to community amenities including shopping, schools, dining and more, rather than ‘a yard with room for a hills hoist’. These properties are in high demand with time on the market so low, they often don’t even get to the market with waitlists so long.The market accepts and loves these low density housing offerings, it’s only a minority now that is resisting the change.

Having ‘traditional’ views doesn’t make them right.

Some commentators predict that national immigration rates will exceed 500,000 per year for an extended period of time; which will mean housing demand will only intensify. However, we know it’s the lack of a coordinated approach between federal and state governments that’s seeing us falling short on supply and worsening the crisis. Without a clear strategy, housing pressures will continue to mount—especially in high-demand regions like the Sunshine Coast, which remains the top destination for internal migration.

Regardless of the numbers, we have to accept that immigration will continue at high levels indefinitely, with the vast majority of these people likely to accept higher density living. This means that we need a rethink of density if we are ever to solve the housing crisis. It is not likely to happen any time soon, again suggesting certain housing types will be even more undersupplied than others, increasing the opportunity for capital growth and rental increases.

The Bottom Line

While these grants highlight that the state government doesn’t fully grasp what’s needed to solve the housing crisis—and can’t do it alone without federal coordination—what they do confirm is that our predictions about ongoing price growth are well-founded. The combination of low supply and ever-increasing demand means strong property value appreciation is inevitable.

For those looking to secure their financial future, this presents a huge opportunity. By investing in property now, you can benefit from this long-term growth while also providing much-needed rental homes for fellow Australians. It’s a win-win: you strengthen your financial position while playing a critical role in easing the housing crisis.

Find out how you can take advantage of this moment—because smart investors don’t wait for the market to change, they position themselves ahead of it.