Government policies, rate cuts, and market shifts are setting the stage for positive movement in the Peninsula property market

Following the recent federal election, several new measures are set to impact buyer demand, affordability, and lending conditions from now through mid 2026.

The government is expanding access to high-LVR lending (up to 95%) for first home buyers, significantly lowering the upfront deposit hurdle, especially for those previously unable to enter the market. What's different this time is the virtually limitless quota the Government has allowed. No more income tests. No more place limits. No more capped allocations. From January 2026, if you're a first-time buyer, you're in. Additionally the Lenders Mortgage Insurance is also covered & any Hecs debt is not taken into consideration in their lending standards.(see below)

 HECS Reforms (Effective Jan 1, 2026)

Two major changes are on the way:

• 20% of existing HECS debts will be cancelled, helping reduce borrowers’ financial commitments.
• HECS/HELP debts will no longer count against lending capacity, which will improve serviceability for many younger buyers.

This is expected to open the market to a new wave of eligible homebuyers in early 2026.

 Projected Migration Growth

The government has confirmed increased migration targets in the coming years. With Melbourne’s population expanding, the Peninsula’s blend of lifestyle, space, and connectivity makes it an attractive option for newcomers and returning expats alike.

 Interest Rate Easing Begins

After several years of tightening, rate cuts are now underway. Lower interest rates will gradually increase borrowing capacity and ease monthly repayments, supporting market confidence and affordability.

 Rental Market Strength

Rental yields have been climbing, and vacancy rates remain low in many parts of the Peninsula. For investors, this may present a solid income opportunity with long-term capital growth potential.

• First Home Buyers: With smaller deposits soon allowed and HECS no longer impacting borrowing capacity from 2026, many first-time buyers will find the Peninsula a viable, and attractive entry point into the property market.
• Upsizers: Families and working professionals may find they can now access more space, land, or proximity to the coast, making a lifestyle upgrade more achievable than in recent years.
• Downsizers: Those looking to unlock equity from larger homes may find better buying power and more lifestyle oriented options available in local downsizer friendly communities.
• Investors: With strong rental demand, rising yields, and improving affordability, conditions are becoming increasingly favourable for long term investment strategies.
• Speculators: Those with a forward looking approach may see current conditions as the beginning of the next growth cycle, positioning themselves ahead of strong projected demand from Spring 2025 onwards.

Would you like to talk about how these changes might affect your plans?

We're always happy to have a chat to help you explore your next move, whether that’s buying, selling, investing, or simply staying informed.

Please contact Narelle, John or myself for a confidential discussion at any time. It's fair to say we love a chat - particularly about property!!