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This audio version covers: The 2026 First Home Supply Strategy: A Tactical Guide for the Mortgage Brokerage Sector
The 2026 First Home Supply Strategy: A Tactical Guide for Mortgage Brokers
The Australian residential property landscape is undergoing a structural transformation driven by federal fiscal intervention and macroprudential recalibration. At the center is the $10 billion First Home Supply Program (FHSP), a strategy to deliver 100,000 homes reserved exclusively for first-home buyers starting in the 2026–27 financial year.[1, 2] For brokers, this period represents a pivotal juncture where traditional lending must integrate with complex government supply mechanisms.
Inside This Tactical Guide
Step 1: The Architecture of the FHSP
The First Home Supply Program targets the supply side by providing the capital necessary to unlock land and fast-track construction.[1, 2] The federal commitment is structured to act as a catalyst for state and industry investment.
Key Program Composition
The $10 billion investment is bifurcated to reduce risk for large-scale developments:
| Component | Investment | Strategic Objective |
|---|---|---|
| Federal Grants | $2 Billion | Infrastructure and last-mile civil works.[1, 2] |
| Concessional Loans | $8 Billion | Improving developer feasibility and low-interest debt.[1, 2] |
| State Matching | $2 Billion | Matched funding to initiate projects.[1, 2] |
The “At-Cost” Pricing Advantage
Homes delivered under the FHSP are intended to be sold at the actual cost of production, estimated to be up to 20% below market value.[3] This relies on utilizing vacant or underutilised government land, removing the significant land-value inflation component.[1]
Step 2: State Implementation (The SA Vanguard)
South Australia has emerged as the national template with an $801.5 million deal to deliver nearly 7,000 homes exclusively for first-home buyers.[4]
The South Australian Infrastructure Deal
| Infrastructure Focus | Allocation | Housing Impact |
|---|---|---|
| Water Infrastructure | $300 Million | Unlocking 4,000 new homes in Northern suburbs.[4] |
| Playford Alive Works | $50 Million | 400-home precinct reserved for FHBs.[4] |
| Renewal Projects | $184 Million | 1,700 high-density dwellings across Adelaide.[4] |
Step 3: Regulatory Recalibration (APRA 2026)
Effective 1 February 2026, APRA is activating a debt-to-income (DTI) limit, restricting loans with a DTI ≥ 6 to no more than 20% of a bank’s new mortgage portfolio.[5, 6, 7, 8, 9]
Strategic “Construction Exemption”
Crucially, APRA has provided an explicit exemption for new housing supply. Loans for the purchase or construction of new dwellings are exempt from the DTI limit to avoid constraining new housing supply.[5] This makes the FHSP pipeline the primary channel for high-leverage clients.
Step 4: Compliance & ASIC Surveillance
ASIC’s 2026 priorities focus on misleading pricing and misconduct exploiting consumers in financial difficulty.[10, 11] Brokers must ensure transparent communication regarding government schemes, specifically shared equity models like “Help to Buy”.[3]
The MFAA recommends that brokers advertising FHSP-related loans should:
- Ensure rate and comparison rate match current lender info and include mandatory warnings.[12]
- Identify clearly where rates are “from” and acknowledge they are not available to all consumers.[12]
- Avoid absolute claims like “Guaranteed Approval”.[12]
Step 5: Tactical Roadmap for Brokers
The 2026-27 window requires brokers to re-engage “deposit-poor, income-rich” professionals. Since 1 October 2025, the 5% Deposit Scheme has had no income caps and no regional price limits.[13, 2]
FHSP At-Cost Pricing (20% Discount) + 5% Deposit Scheme (No LMI) + State Grants ($10k FHOG) = Immediate Equity Advantage
Mastering the New Housing Economy
The 2026 First Home Supply Strategy represents a rare alignment of federal power and macroprudential flexibility. Brokers who understand the DTI exemptions, “at-cost” pricing lists, and the Round 3 HAFF partnerships will move from credit brokers to strategic housing advisors.[5, 14]
Download the 2026 Broker Strategy Toolkit
