#106 - How First Home Buyer Grants Push Prices Higher

Property prices don’t just “go up” on their own, they respond to incentives, and right now Australia is drenched in them. We’re fired up about how first home buyer grants and 5% deposit schemes can look helpful on paper while quietly bidding up the same entry-level homes first home buyers are trying to afford. When you add 95% lending into a rising interest rate environment, the risk isn’t abstract anymore. It’s repayment stress, defaults, and a system that starts planning bailouts before the ink is dry. 

We also dig into the political heat on investors, especially talk of changing the capital gains tax discount. If a meaningful chunk of property investors sell or stop buying, the rental market doesn’t magically improve. Supply shrinks, vacancy tightens, and rents climb, which hits the exact people policy claims to protect. We talk through why this matters for retirement planning too, because many Australians are trying to build long-term wealth outside the age pension by creating a property investment portfolio they can actually control. 

Then we shift to what we’re seeing on the ground: real growth numbers, including big monthly gains and why markets like regional Queensland surged so hard. We zoom out on how to think about “the next affordable market” without chasing yesterday’s winners, using fundamentals like infrastructure spending, employer demand, and risk checks like insurance costs and vacancy rates. 

If you want clearer thinking on the Australian property market, interest rates, inflation, and smart property investing strategy, hit play and tell us what you think. Subscribe, share the show, and leave a review so more people can find it.

Transcript

Prices Surge And Big Gains

SPEAKER_00 0:00

Property prices have been absolutely shooting through the roof, left, right, and center. One client making 40 grand in a single month. Today we're going to be talking about that and the impact that the first buying grants have had around Australia.

Oscar Don 0:13

We've got some alarming statistics that have been publicly released last week in the media and how it actually affects not just the first home buyers getting into the market with 95% loan, but also us investors who are trying to expand their investment portfolio and how the effects of that impact us, not just for the short term, but also for the long term. Sit back, relax, and enjoy the show.

SPEAKER_00 0:40

Welcome back to another episode of the Finance Bible Podcast.

Oscar Don 0:44

Zeke here and your co-host Oscar. But before we get into it, please note that nothing in this podcast should ever be considered as personal financial advice.

SPEAKER_00 0:53

Although, if financial advice is what you are seeking, let us know. We can get you in touch with the correct team.

Oscar Don 0:58

But for now, sit back, relax, and enjoy the show. Let's get into it. Welcome back. We are in person once again. The boys are together. We're in Sydney, we're actually in front of a candle on a table, which is quite romantic and a bit of a different bit of a different setup from normal.

SPEAKER_00 1:19

I just want to clarify for those of you who are really good with your imagination and might have your eyes closed, dozing off, listening to such a beautiful voice. When Oscar said on a table, wear chairs with a laptop on the table. We're not both sitting on the table with the candle, just to clarify.

Oscar Don 1:34

Yeah, I don't know if people would think that, but you never know. Also, I want to give a quick shout-out to our UK listeners. There's been a sudden rise in the amount of individuals from the UK who have jumped on board the finance bible. We're talking just a bit out of London. How far out we're seeing?

SPEAKER_00 1:49

We're seeing all the way up to Manchester at the moment. Yeah, well, there we go. Quite quite a wide range, even though that's not very far actually in Australian terms. So for all of our listeners that are that are local, you're talking basically Newcastle or Sydney, I'm pretty sure. Yeah, but maybe a bit further, I don't know.

Oscar Don 2:05

Thank you. Thank you for listening anyway. It's great to have you guys on board.

SPEAKER_00 2:07

Yeah, welcome. Glad to have you tune in. And to everyone international, worldwide, you may say, it's good to have you back. We'd love to see it. The certain Texan listeners.

Oscar Don 2:16

If you're if you are the infamous Texan who's been a supporter from day one, can you please somehow message us on Instagram or just let us know who you are because we owe you a beer.

Why Grants Backfire On Everyone

SPEAKER_00 2:26

Yeah, we'll do something special for you. We might uh we'll send over a gift or put on a little voucher or something at your local. We'll see what's going on. Uh but jumping straight into it, basically I'm I'm a little bit livid with the government, if I'm being honest. And uh I don't think you I don't think you're alone. I don't think that, yeah. I think you'd be alone if you're not living with the government. But surprise, surprise, they're all idiots. We all we've all known it forever, and I'm quite vocal about this issue. But we've been saying it for a while now that the first buyer grants are one of the dumbest things that we've ever seen. And the problem we're having now, I mean, there's many, many problems, but one of the problems that we're having is a little bit of backlash on investors at the moment. And one of them is being okay, in the next budget, we need to review the capital gains tax and we need to reduce the amount of discount that you get or increase the capital gains tax basically to investors. Now, that could be for shares, it could be for property, it could be for crypto, it could be across every asset class, but for some reason, property investing is bearing the brunt of it. Yeah. And that's because property prices are going through the roof, which they blame on investors. Guess what? We've got a lot of people renting. People need investors because they can't afford houses and they're renting.

Oscar Don 3:35

But I think it's quite ironic because yes, the government is saying, you know, put your money in super for your retirement. You know, we will pay you a pension anyway. And Australians are figuring out, well, I don't want to rely on the government to pay me my pension because that is not enough for my life. So I want to put my own retirement in my own hands and I'm gonna go out and actively invest in property and learn how to do it. And you've got people, you know, learning all the tricks and the trades and buying in their super buying personally, buying in trusts or whatever the structure that it is. And now the government's trying to punish the investor for trying to set up them themselves for retirement and basically want them to pull back on investing to just be off the live off the government. Well, it's ridiculous.

SPEAKER_00 4:16

When you when you do the math as well, like let's just assume the average person gets a pension for 13 years, they kick the bucket at 80, they receive the pension at 37. Assume most people are a couple, just to keep numbers really easy. What are we talking? 30, 34 grand a year from the government over 17. I think you meant 67. You said 37. Did I?

Oscar Don 4:34

Yes. That's a very early pension.

SPEAKER_00 4:36

Well, my bad. Yeah, assuming 67, the pension age, is when they start receiving the pension. So they get it for 13 years, kick the bucket at 80, they're a couple, call it 30, 34 grand a year. You know, you're nearly talking upwards of half a million dollars from the government in that amount of time. Now, the government are going, well, you know what? We're better off limiting property investors, making more people rely on the pension, having to pay out that half a million dollars to them throughout their life because they can't afford retirement, just so that we can get an extra, what, maybe 30 grand in capital gains tax per person or per property investor? Wow, real smart idea. Let's lose 470 grand for no reason. And while we do that, why don't we really impact the property market, which is Australia's biggest contributor to GDP? Why don't we make people sell their properties and get out of them to create less rentals for all the immigrants that come in that go where to rent because property investors sell? That's a great plan. Like every every single thing they're doing is just limiting the market. And they're like, Yeah, well, we'll just help more people get into homes. Well, how do we do that? Let's increase the amount of money we can contribute to them getting homes. First home buyer grant, 5%, 95% loan. Well, genius. Bang, you need a 5% deposit. Property prices go up 50 grand, 60 grand in a single month, like we saw in regional Queensland, and we'll talk more about that later. Yeah, we will. Um, and then the first home buyers that have done a 5% deposit because they only had a 5% deposit because they can't save money because everything's expensive. Well, that's okay. We we're screwed.

Oscar Don 6:10

Yeah, we're screwed. That whole thing, I remember when the the first deposit scheme came out, we we said to each other, wow, this is a recipe for disaster. You're putting people who can't afford a mortgage or to buy property, you're giving them access to purchase property they can't afford the repayments. Like a 95% lend is ridiculous, with especially with interest rates going up as they are right now. We just had another interest rate increase two days ago, as of the 17th of March 2026, depending when you're listening to this. But the ironic thing is the Senate has actually put aside$200 million to help with the homeowners who purchased when the first homeowner grant for the 5% deposit.

SPEAKER_00 6:53

But deposit deposit, 95% lend, you're right.

Oscar Don 6:55

For the 5% deposit to help them get out of the default. So they've put aside money because they know they're going to default on their loan. Which if that just doesn't tell you that the government is absolutely cooked, I don't know what does, because they're basically already they've already realized that oh, oh no, the people who have bought these houses can't actually afford the mortgage repayments. It's our fault. But at least they're in the at least they're in a homeowners. It's like, what on earth?

Inflation Loop And Default Bailouts

SPEAKER_00 7:22

Are they gonna just help them out? It's ridiculous. It's such a funny thing to analyze and watch the back and forward. Like the government goes, so for those of you don't who don't know, like interest rates are rise or get it increase when CPI or inflation is going up too fast. One of the biggest contributors to inflation is property because it's about 22% of the total like CPI index. So when you've got property going up at a quick rate, the inflation index is slightly higher. You throw in things like insurance. Obviously, insurance costs are going up and a huge contributor as well because we've got a lot of flooding and so on. But if property prices are going up, then you end up in a position where inflation is going up, and then you end up in a position where the RBA want to increase the interest rate, making it more unaffordable for everyone. And then the government goes, Well, it's unaffordable for everyone. What we need to do is we need to find a way to make it more affordable for everyone. And they do things like the 5% grant. And then we're in a position where property prices are going up because the government's making property easy to get into for first home buyers. And then the RBA and the inflation are like, well, we've got to keep increasing the rates. So then the government are like, all right, well, let's give out$220 million to help loan defaulting. So then the people who have that incentive, where they're like, well, if we default, there's a money put aside for us, they can spend more money because they're not worried, which contributes to inflation, and we're in a never-ending cycle.

Oscar Don 8:44

And then they carry on about how ridiculous expensive the whole uh country is and the interest rates, but they are contributing to it. They are the reason. So it's all it's all just goes around and round in a circle, like a little uh carousel at a at Luna Park, for example.

SPEAKER_00 8:57

Oh, what a place to be.

Oscar Don 8:58

Yeah. The floors dropped out from under you, you're stuck to the wall, just spinning around. That is a great ride.

Real Client Growth In Queensland

SPEAKER_00 9:02

Yes, that is. I do enjoy it.

Oscar Don 9:04

But property itself, we'll we'll go to the exciting part now. We've talked a bit about what's happening with the government and it's a bit crazy. But property, as you mentioned earlier, we've had a client make 40k already in one month. Pretty good if you ask me. If I someone came to me and said, Hey, do you want to make 40 grand in four weeks? I don't think anyone would say no. But what we're finding is where are the cheap suburbs? Where do people buy? Where are people investing personally? So, from our point of view, because this is what we do day in, day out, Queensland. Everyone has seen the articles, everyone has seen you know the numbers of Queensland the last, especially the last five, six years. It's been a Golden Triangle, the Golden Triangle. We used to love that. The Golden Triangle. It used to be called them. But Queensland itself, like we had clients getting into some regional suburbs in Queensland to the sub 500k for a four-bedroom house, 800-meter square block, you know, decent house, decent block. Now prices have jumped dramatically. People in that market, they're making, you know, 150, 200, 300 grand already in two, three, four years, which is pretty good if you ask me. But it kind of shifts the conversation to especially those people listening who are on the fence and kind of wanting to get in the market and they think things a bit too expensive. Where is the next area like Queensland that is now affordable and where we believe is going to move up to reach the limits and reach the actual areas of uh the capital growth?

Finding The Next Affordable Market

SPEAKER_00 10:30

And it's actually really funny as well when you look at it, because we've got certain clients, obviously, who have made like 40, 50 grand in in a month just from getting into the right property at the right time and government stimulus and so on. But the funny thing is, I actually what we do with our company is ultimately every year we send out emails to all of our clients with how much money they've made in terms of their property growth over the last 12 months to date. I went through and with the platform that we built, that we can basically do those calculations and have it all done for us, we are now in a position where I've done it for the quarter. The quarter's not even over, but I've gone through and I've done it for the quarter and assessed it. And what we found is our average client already this year, so between January 1 through to now, including that obviously there's a lag and everything, and property markets don't just update day by day, it's a bit slow and blah, blah, blah. We've actually found our average clients made over$55,000 this year alone already. So property markets are moving. Yeah, we're marched, and I did that like a week ago. Property markets are moving drastically, and a lot of that is due to the stimulus, a lot of it's due to the immigration, a lot of it's due to people obviously needing houses and so on. But it's just gonna keep going. And the more the people or the government make it easier for first home buyers or keep handing out stimuli or putting money aside for people who are defaulting and so on, it's just gonna keep happening. They can keep raising interest rates, it's not gonna have an effect ultimately. There might be a slight like two-week, oh no, interest rates have gone up. And then after that, guess what? People still need somewhere to live.

Oscar Don 12:05

Yeah, and people who are serious about investing aren't going to you know pull out and sell when there's interest rate rises. If you're serious about it, you look at the long-term approach for the next 20 to 30 years, not the next 12 months. So if you're really serious, obviously you need to speak to a team who can guide you. But Zeke, where do you think the next without giving it away, because obviously that's why we have clients come to us to give them exactly where we think, but give us a rough indication of where you think is looking affordable and all the metrics lining up for the growth.

SPEAKER_00 12:35

Well, look, what we what we need to think about is okay, where has moved, where is moving, where still capable of getting these grants, and where are people actually spending the money? Where's all the government spending, where's the infrastructure spending, where are big companies going? And there's been certain places, I'm not going to specify where, that have had if we go back to Perth, for example, like last 24 months, say 36 months, originally investing there was pretty taboo. Not a lot of people were doing it.

Oscar Don 13:03

All of a sudden, the mining crash and the boom and everything.

SPEAKER_00 13:05

Yeah, that's right. They're worried about a bunch of nonsense. But what happened there was ultimately everything got priced out everywhere else. Like your Morton Bay areas in Queensland, which were originally probably one of the best areas to invest. Like we had clients who invested there. Me, for example, you know, you made a bit of money on that. Bill for say 500 grand a four-bedroom house on a decent block, like 480 square meters, now worth a million dollars in what three years, four years. So when you've got those areas that are going up like that, people have to then go, hang on a minute, I'm over the median price point. I can't afford to do that anymore. And they then move to areas like Perth, for example, which the exact same thing happened. We were buying for 350 grand there originally, now 700, 800 for them, and or a million for newer things. If you take a zoomed out approach and you look at, okay, where are the next areas where that's occurring, that is enough to help you narrow it down. From that, you should be able to have a good um indication. But there's definitely areas that fit into that that are wrong and could have bad insurance costs, could have bad consequences, bad tenants, high vacancy rates, maybe mining related, and so on. So you've got to assess all the different risks there. And I won't go into it too much further because I don't want to completely give away where we're investing. But I will say this: if you've gone on and you've looked at some of our recent wins, for example, if you're seeing that, we're posting that a few months later because we don't want to release to the public where our investors are making money, because then you can do the exact same thing, obviously. So if you're seeing that and going and buying that property or that area, sure you might make some money, but you've missed the biggest growth because we delay it. Oh, there you go. Nothing to add, mate. That's spot on. Okay. Yeah, why why would we uh disclose exactly where we're investing?

CGT Changes And Rental Fallout

Oscar Don 14:50

It's perfect.

SPEAKER_00 14:51

Well, I do want to just quickly circle back for a minute before we uh before you clock off and let you go and enjoy the rest of your day or doze off to sleep. Ultimately, this whole issue of the CGT, I just want to bring it up again. It's a big issue. The capital gains tax. What happens if they announce that? How many people are going to stop investing in property? And there was actually a survey done which we got notified of by a colleague of ours, which we won't disclose because I don't think it's public information. But one-third of property investors ticked saying that they would sell their property or discontinue investing in property if the CGT tax discount was discontinued. So if you've got that many people that are investing in property, pulling out or selling their property, and you're going to say owner-occupiers, for example, imagine the crunch on the renters. Well, yeah, rents are gonna have to increase. Imagine the people who are out there trying to rent and there's less supply, more demand, prices go up with that. There's common. They obviously haven't thought about that. Well, no, they don't think about anything. Which is ridiculous. They don't think about anything. And it doesn't solve the problem anyway, because it's not like realistically, investors are a small portion of property owners. Like 30% of renting, which would infer 30% of properties are investment properties. So like realistically, you're 70% of the market is the problem, but they're targeting 30%.

Oscar Don 16:12

But as we said earlier, like if you're serious about building long-term wealth, like even though yes, the discount will be reduced, I would still rather you know make X amount of money than no money at all. Like, even if I'm getting taxed more than what I normally would, I'd rather be, you know, 30 grand off, better off than like zero. Like you're still technically making money, it's just not as much as you will be right now.

SPEAKER_00 16:35

It's funny you mentioned that because I've actually done calculations into this. You know I'm a I'm a numbers head and I love it. So with the capital gains tax, even if it is the discounts reduced or eliminated, even, you still end up in a position where property has been growing at 8% per year, give or take, for the last 20 years straight. It's been performing equally, if not outperforming, the ASX 200 for 20 years. Ridiculous, no one knows that. But even at that rate, with leverage and with other depreciation benefits and so on, you still end up making more money than you would elsewhere. So, I mean, it's still a win-win. I always believe in property investing, you believe in property investing, it's still going to be the way forward. And as simple as that, I might even just shut my mouth now and leave it there.

Oscar Don 17:21

That's a great way to end the end the app. Bit of a government update, bit of a property update where people are investing in the past, but I didn't give away anything about where we're investing. But if you want to learn more, hit us up. If that text is listening, hit us up.

SPEAKER_00 17:35

Yes, but I want to give you a beer, a vodka, something. I just want you to be a happy man. That's what I want. Or woman. Yeah, you never know. Yep.

Oscar Don 17:43

Well, until next time. Dale. Ciao.

SPEAKER_00 17:46

Well, that is the end of the episode. We hope you enjoyed it. And if you did, you know exactly what to do.

Oscar Don 17:52

Hit that follow button, like button, subscribe, share it to your friends, families, or even a coworker.

SPEAKER_00 17:58

If you're really feeling generous, you can send it off to an ex. But catch you next time. Hope you enjoyed it. Dale.

Oscar Don 18:04

Ciao.