September Property Update 2025: The 5% Deposit Scheme, First Home vs Investment, and Finding Growth Locations with Arjun Paliwal

 The rules of the property game just changed and you need to know how.

In this Get Rich episode, Molly is joined by Arjun Paliwal, CEO of InvestorKit, to unpack the big news: the 5% deposit scheme for first home buyers. What does it mean for property prices? Should you buy your first home to live in, or start with an investment property? And where are the growth hotspots in 2025?

We also cover:

• The impact of the 5% deposit scheme and new price caps
  
• When buying to live in isn’t the best move
  
• Mortgage vs investment: what should you prioritise?
  
• Why you don’t actually need 8–10 properties to retire comfortably
  
• Key data points to spot growth locations
  
• How kids (yes, really) impact your borrowing power
  
  

This is your September, straight-talking property market update to help you make smarter moves in 2025.

This episode is brought to you by InvestorKit, Australia’s #1 Buyers Agency for 2023 and 2024. They specialise in helping investors find high-growth properties utilising industry leading AI and data driven research process across Australia. 70%+ of the properties they purchase are off-market and they have consistently outperformed national average capital growth rates by over 49%. Whether you’re looking to build your property portfolio or secure your first investment. Check them out here.

CHAPTERS

00:00 – Welcome to Get Rich & Molly’s Money Mission
00:31 – The New 5% Deposit Scheme Explained
03:01 – Will the 5% Scheme Push Prices Up?
05:07 – What Women Should Do Before Jumping In
06:53 – Why Investor Demand is Surging Again
09:10 – First Home vs Investment Property: Arjun’s Checklist
12:01 – Mortgage vs Investment: Which Builds Wealth Faster?
15:13 – Case Study: Why 3 Properties Could Be Enough for Retirement
17:57 – The Secret to Spotting Growth Markets
19:42 – Do Kids Affect Your Borrowing Power?
21:23 – Is Buying in Melbourne Worth It Right Now?
23:03 – Where to Connect with Arjun

LINKS FROM THE EPISODE

Arjun’s Property Podcast – The Property Nerds: https://www.investorkit.com.au/podcasts/

CONNECT WITH ARJUN PALIWAL

Website: https://www.investorkit.com.au/
Instagram: https://www.instagram.com/arjpaliwal/
LinkedIn: https://www.linkedin.com/in/propertybuyersagent/
TikTok: https://www.tiktok.com/@investorkit

CONNECT WITH LADIES FINANCE CLUB

Join our free Facebook group - Ladies Finance Club Money Chat
Website: https://www.ladiesfinanceclub.com/
Instagram: https://www.instagram.com/ladiesfinanceclub/
LinkedIn: https://www.linkedin.com/company/ladies-finance-club/

TAKEAWAYS

• The new 5% deposit scheme lets first home buyers enter the market with as little as ~$42k saved.

• Government incentives almost always push property prices higher over time.

• The right first home should also stack up as a strong investment, not just a place close to your favourite café.

• Paying down your mortgage isn’t always the best move, debt recycling can free up equity while still reducing debt.

• You don’t need 10 properties to retire, three well-chosen ones plus super can be enough.

• Competition signals growth: strong auction clearance rates and low supply are your best friends.

• Children, credit cards, and student loans all reduce borrowing capacity.
  Melbourne is in recovery, but buyers need to be prepared for negative cash flow.

SOUND BITES

“Think you need $160k to buy an $800k property? Think again, with the new 5% deposit scheme, it could be just $42k.”
“The longer you wait, the harder it gets. Incentives like this push prices up, timing matters.”
“Don’t assume you need 10 properties to retire. For one couple, three well-chosen properties plus super was enough.”
“If you’re buying just because it’s close to your favourite coffee shop, you’re not investing, you’re gambling.”
“Competition is your best friend in property. Where there’s competition, there’s growth.”
“Yes, kids affect your borrowing power, banks count them as dependents, and it can reduce what you can borrow.”
“Melbourne hasn’t grown much in six years. That means opportunity but you’ll need to stomach negative cash flow.”

TRANSCRIPT

[00:00:00] Molly: Welcome to Get Rich, the podcast that helps you do just that. Get rich and stay rich. Hey, I'm Molly Benjamin. I'm the founder of Ladies Finance Club, one of Australia's largest financial education platforms for women. But before I started helping thousands of women take control with their money, I was a hot financial mess when it came to my own finances and not the fun kind of hot, more like crying in a supermarket, wondering where all my money went, kind of hot.

[00:00:29] But here's the thing. If I can go from financial mess to owning a share portfolio, investing in property and building wealth, then you can too. My mission is simple to make women rich because when we have financial freedom, we have choices, confidence, and control over our future. Every week on Get Rich, I sit down with some of the best experts.

[00:00:51] In the industry to break down how we can all start investing, growing our money, and creating long-term financial security without the jargon, boring bits or overwhelm. Because when women get rich, we don't just change our lives, we change the world. So if you're ready to start making some smart money moves, hit that subscribe button and let's get rich together.

[00:01:16] Oh, hey there. It's Molly here from Ladies Finance Club. In today's Get Rich episode, it is our property market update for the month, and I'm joined by Arjun Al, CEO of Investor Kit to unpack the big news shaking up the market right now. The new 5% deposit scheme for first home buyers. So we're gonna cover what this actually means for property prices, whether it's smart to buy your first home or an investment, how investors are responding, and the key data points to watch if you are chasing a growth location in 2025.

[00:01:50] This episode is all about helping you make smarter property decisions. Let's get into it. Arjun, thank you for joining us for another property market update.

[00:02:00] Arjun: Yeah. Thank you. It's, uh, lots going on in the market, so keen to catch up on it.

[00:02:04] Molly: Yeah. And then we've got a whole bunch of specific questions that have come straight from the women who follow us on social media that I would love to ask you as well, but maybe as you said, it has been a busy period.

[00:02:16] So could you just give us a bit of an overview of what we're seeing at the moment in the property market this

[00:02:21] Arjun: month? Of course. So firstly, the weather's getting a lot better. We're hitting into that time of year into spring, and what's really exciting right now, but I guess things going on is that from a property owner, if you're in the market currently, there's been a wave of changes announced for first home buyers.

[00:02:39] Mm-hmm. And October 1st onwards is essentially first home buyers are now gonna be having much larger price caps. So someone in New South Wales can now go up to 1.5 million with a 5% deposit for a first home buyer. Now, if you did, as an example, go up to say 800 K, which is where for first home buyers, there aren't any stamp duties on that.

[00:03:01] You have this new 5% policy with unlimited places allowed and no income caps. It means that someone would be able to get an 800 K property with essentially $42,000 or $43,000 a savings for it, which would be the 5% deposit plus lawyers in say, Peston building. Not including any buyer's agents or anything, but what that showcases is that this is an opportunity for first home buyers to be able to get in with a much lower pool of savings and be able to grow their wealth from there.

[00:03:34] Molly: So with this 5% deposit scheme we're seeing, do you think this is gonna push up property prices? 'cause there is a bit of noise in the media happening around this.

[00:03:44] Arjun: You are absolutely right to ask that question, and the short answer is yes. It's gonna push it up at the end of the day. We've studied many previous times where incentives have come in for first home buyers or things have come up for any buyer group, and it just equals increased prices.

[00:04:01] So it's a matter of first and first served, like if you're in this earlier pool of people who are looking to get your foot into the market. Then of course it's gonna benefit you. Now, people have to realize though that prices overnight don't go up hundreds of thousands of dollars. It is days that turns into weeks, weeks that turns into months.

[00:04:21] Property does react on comparable sales. There are protection mechanisms in the industry. So for example, a property valuer, if they don't have comparable sales, someone can't just go gun ho crazy simply because they are keen 'cause of this 5%. They're gonna think about these things. But every three months that goes by, it is starting to step away from you.

[00:04:41] Mm-hmm. But if I give an example of say, a $1 million property, 5% is 50,000. Hypothetically speaking, a $2 million property is a hundred thousand. Yeah. So it can feel like prices have risen a lot. Mm-hmm. And they've gone from one to two. But the 50 going to 100 mm-hmm. Is not something that's moved at a huge pace in comparison to the one to two.

[00:05:07] Yeah. So still like 5% in being able to get in up to that price cap of 1.5 in New South Wales is most definitely still an advantage, even if it does push prices up. Mm-hmm. But yes, the longer you leave it. The worse it's gonna be for you, but it's still better than not having anything at all.

[00:05:24] Molly: Yes. And I imagine as well, with people looking at those higher price points, even with a 5%, at the end of the day, you still need to be able to service that loan and pay it back every month.

[00:05:33] So absolutely will be something that obviously when they speak to their broker, they'll work that out. So I guess then, what is your advice for women who are like, I wanna make the most of this 5%?

[00:05:46] Arjun: Yeah, absolutely. I think the first bit of guidance is that. If you can go and get your numbers worked out, not so much from the what this purchase equals for you like or what you can do to get in, but the numbers to work out as to what repayments you can handle, how you can manage that.

[00:06:00] Because no matter if it's a five or a 10 or a 15% or a new government this, or a government that at the end of the day it's still equals. Mm-hmm. You need. Pay a loan and be able to hold that property. So work out what you can do there. Now the minute you've got that worked out, having a 5% deposit and being able to purchase something is much more in your favor.

[00:06:20] Mm-hmm. Than it is being waiting till get to 10. Yeah. 15 or 20. Now I'd go on one step further. Yeah, we talked about the five step for 5% for first home buyers, but if you're not a first home buyer and you own a place, this is also an opportunity for you to look at your equity, look it for you to build an investment portfolio because you don't wanna do that when there's this whole buyer base of people who weren't able, but now are able to do that.

[00:06:46] And you are thinking you're gonna wait for the perfect time to get into the investment space. If you are capable to be an investor in today's world and you've got a property or you're looking to rent fast. Do make sure that you are looking closely into not leaving that behind. 'cause if you leave it behind, then remember the other buyer base is still pushing that prices back up.

[00:07:05] Molly: Absolutely. Such a good point. So apart from obviously the big news of the 5% deposit, what else is happening? Well, what else are you guys seeing in the market at the moment?

[00:07:15] Arjun: Yeah, of course. So the first thing that we are seeing is a renewed amount of investor inquiry. Mm-hmm. What happens is when these things happen and interest rates are pointing downwards in the direction, and then on top of that, people realize that the last two years of interest rates haven't hurt the markets as much as they thought it would.

[00:07:35] Mm. And they're coming out, it's almost like. You know, you're coming out of like this, what was thought as darker times, but it wasn't as bad as all at all. And so now you're coming out to this new time ahead and you're going, well, I wanna really stretch my legs here. I wanna basically. Slap myself on the wrist and go, why did I pause?

[00:07:53] Why did I not do something? I mean, amongst all this chaos. Yeah. And we are seeing that. To give you some insights, we, as the largest VA buyer agency in the country, were able to look at our inquiries. Mm-hmm. And we had about 400 people reach out last month. This month, that number was closer to 600 in August.

[00:08:11] Wow. And we're predicting that in September. It's probably closer to 700 people reaching out if this trend starts to continue. So. That's wild when you think of the math on like how many Aussies have just woken up and we're only one company. Yeah. So I, I would say that the trend is national wide. Yeah. So I would say that for investors that new in inquiry's pretty big.

[00:08:31] Molly: Yeah. And I actually spoke to a bunch of brokers last week and they were knocked off their socks with the amount of inquiries and people now taking that opportunity to work out how much can they actually borrow and can they use this 5% scheme? Alright. Is there anything else on the kind of overview of the property market you want to cover or can we jump into those questions we've been sent?

[00:08:56] Arjun: Yeah, let's go into those questions. I think the, uh, right now the market is all about that 5% conversation right now. Now people are wondering what it means. So if I add any more layers to it, it'll take away from just that focus, which is the big part of the conversation.

[00:09:09] Molly: Okay. Yes, absolutely. Well, this might lead into that conversation as well, but the first question came from a lady and she was just like, do I buy my first home to live in?

[00:09:20] Or should I start with an investment property? 'cause she'd read some books and the books were like, you know, always buy the first place, make sure it's your home. But is that necessarily always the case?

[00:09:31] Arjun: I'll show you when it is the case and when it isn't the case. Firstly, when it's the first time buyer rule with everything that's going on, we would actually be silly to look after that.

[00:09:42] So I would first start there to make sure that if, depending on where you live in Australia, 'cause this is the part that varies where you live in Australia, what you can get a house, not a unit for that first time budget with the 5% off. How much of that in your relevant state can you also not only combine with the 5% deposit, but also potentially stamp duty waiver, right?

[00:10:02] Like example? Yeah. New South Wales gives you to 1.5 million or 5%, but only up to 800 if you want 5% and stamp duty, right? Mm-hmm. After 800 stamp duty discounts to a certain amount, but I guess that's the numbers part first. Now, once we weigh that up. Step two is, are there any markets in your local area that pick the boxes of, I could live there, it's a house.

[00:10:24] I could meet those 5% rules and as data to be a great investment location? Mm-hmm. If it's a tick. Tick and tick, then you should definitely look at that first home because whilst you're living there, you can also have the benefits of it being a great investment market. Mm-hmm. But if one or two of those things aren't a tick, I've seen way too many case studies where people have gone on just to tick that, hey, this is my first time close to me.

[00:10:50] I can feel, touch it. It's cheap, affordable in an area. I know it's a unit in a good suburb. You know, they make great lattes and cappuccinos and uh, it's a great hangout spot. And I've seen far too many clients go down that mark. Mm-hmm. And, uh, they're looking back at apartments in the inner west of Sydney that have only grown 50 K in the last five years.

[00:11:09] Where houses across regional markets in Australia or capital cities in Australia, the same budget they got in five years ago. Mm-hmm. Have gained over 300,000 in next city. Now this isn't just one or two examples, I'm talking dozens. So if you feel you can make the 5% part, you feel good about the standard duty pricing as well, and at the same time you are able to get a place where the area and the budget for houses, not units is going well.

[00:11:33] Example, if you are in parts of regional Victoria, or if you're in New South Wales, then this will do a lot for your budget. Mm-hmm. But if you are not getting that win-win across all those things, you're just trying to buy an investment, buy a home that you can think it works out as an investment. Yeah.

[00:11:47] Fingers crossed, but it won't.

[00:11:49] Molly: Yeah. And you're hearing it from the expert guys, so make sure you take note of that little checklist there. Another question we got, and we actually get this a lot, and I know you can't give obviously financial advice or personal advice, but this one lady was like, do I focus on paying down my mortgage or should I buy an investment property?

[00:12:12] Arjun: Mm. It's a common question.

[00:12:14] Molly: Mm. And

[00:12:14] Arjun: I think there's a few, it depend ones that I can say here. Yeah. But let me look at this. From paying down soon, repayments versus paying down in lump sum and look at these two different, uh, scenarios. If you're paying down in like extra repayment. But you do have the savings to get an investment.

[00:12:32] Mm-hmm. That getting an investment and having the growth on an overall compounding figure, call it, say 600,000 at 5%, that's an extra 35,000, uh, $30,000. Mm-hmm. At $30,000 an extra growth. Could you have easily have saved that 30,000 extra whilst that property sat there and grew for you? So I think the power of having multiple compounding assets, if you're just talking about, I've got the money and I just wanna know if I should divert my cash flow each month to this or that it's growing wealth, it's gonna have a bit outcome.

[00:13:03] We been just focusing on paying down your home. However, the second part is if you have a lump sum, now if you have a lump sum, you can have the best of both worlds. And an example here could be, I've got 200 K sitting in the bank account. And I'm focused on putting that in my offset, and I wanna just focus on paying down my own loan.

[00:13:23] Should I or should I not? Well, if you've got 200 K sitting in that offset account, you could potentially would obviously seek out financial advice. You could pay down your home loan. Mm-hmm. And reduce it from a million to 800 as an example. And then you look to take that equity back out 200 K as a deposit for investment properties and now your deductible debt.

[00:13:47] Is that 200, but then your non-deductible debt has gone down from a million to 800, and this is something called debt recycling. We are trying to reduce the money you're owing on your home and then being able to pull it back out as equity, but the purpose of what you use that money was an investment.

[00:14:03] And so now you have best of both worlds. You technically pay down your home loan. Mm-hmm. But you also pulled out that deposit and put it towards an investment property. If you didn't do it that way and you just completely moved that 200 K off to aside, then you'd be charged interest on that million dollar home loan.

[00:14:18] Like it's your home because it's not an investment property. And you wouldn't have the full tax deductions on your, you know, next investment property. 'cause you pulled it out from offset. So get the right advice on that to see if that's something you can do for your scenario. Uh, mortgage brokers are great people to converse with and then also your accountants to make sure you're doing it the right way.

[00:14:38] But that debt recycling is a really quick way to pay down people's properties whilst still investing. In terms of the first one, if you've just got enough cash flow to pay down the home and not save for a investment just yet, then focus on the home payment. But if you've got extra cash flow that can be diverted to handle another property, and you've got the money sitting for it.

[00:14:57] Building compounding wealth is your answer.

[00:14:59] Molly: Nice. And as far as the strategy goes of like maybe buying a number of houses and then selling one to pay off debt, is that a strategy that a buyer's agent would take you through?

[00:15:12] Arjun: Yeah, it's actually a strategy conversation we went through with a client of ours literally yesterday, and I wanna walk you through the scenario very quickly.

[00:15:19] So Fiona and Nick are a client of ours. They live out on Eely Beach. Oh, nice. They actually purchased a property with us in Bendigo, and that property has grown by over a hundred thousand in recent years. Now they also have great equity in their property on Early Beach, a couple hundred k. Now, unfortunately, because of what social media has taught us, everyone thinks that you need eight to 10 properties to get to your end goal.

[00:15:42] Mm. And that's not the case at all. They're in their early thirties and what they were able to map out was that from their own, you know, side, this is not, uh, financial advice in this super, but they saw that this super, when they looked at it just from basic contributions and half the normal growth rates in super funds to be conservative.

[00:16:00] When you combine that with three investment properties paid down, that equals a passive income of 120 5K inflation adjusted. Wow. Which means it's probably around two 60 K that they had to achieve, which is 120 5K today money if you're using a two and a half percent inflation rate. And so what that meant is that it took reinvestment properties plus their super as a couple to hit the goal that they wanted.

[00:16:28] Now we have mapping tools as buyer agents, where the first step we take in building out a portfolio plan. We do it in a general sense by just showing you what things equal. However, what we're able to show you is that three properties for their scenario from someone in their thirties to be okay at retirement in their sixties was enough alongside their super to hit their goal.

[00:16:49] And it didn't include downsizing their family home. It didn't include selling off some funds to be able to go and put higher cash flow commercial property. It was just holding those three properties, which means they're technically just two properties away. We are now using that equity from Bendigo to buy a six 50 K property this year.

[00:17:07] Mm-hmm. And then we're gonna look at equity from the Air Beach home to buy another six 50 K property this year. So started the journey not long ago. By end of 2025, they would've had all the assets to secure their financial future. And obviously they can get financial planning, which I always advise them to do, to look at this Super better to look at that.

[00:17:26] Mm-hmm. But just from a generic property mapping, we were able to reverse engineer that for them and they felt really excited that only three properties is what it takes now, and they're gonna be able to hit their goals.

[00:17:36] Molly: Wow. And yeah, very exciting for them. And I'll just do two more questions. 'cause this one is kind of like, it's, I think it could be many answers, I'm sure, but how do you find good investment locations?

[00:17:52] Arjun: Okay. Lots of depth in this one. Yeah. We have over 30 different data points we check. But when it comes to locations alone, let me say this, there's never been a time in history. Where a market that doesn't see competition does not grow. Mm-hmm. And so when you look at it that way, it means competition is your best friend.

[00:18:11] And competition can be described in a few ways. Auction clearance rates over 70% is high competition, less supply in comparison, or less properties for sale in comparison to the last five years means there's an undersupply and things are gonna start selling quicker. Mm-hmm. And then if they're selling quicker.

[00:18:30] Sellers also don't have to give away big discounts, and so vendor discounting another data term starts improving as well. Also, alongside the saw, there's not many rental properties available for sale, not much building going on, and month on month sellers feel more confident to ask for more and miling prices and things sell quickly and some more.

[00:18:51] So these are all me using quite straightforward sentences, but behind each of these sentences, there's a data point, right? And these data points showcase this happening. So if you want an easy way to find growth, where's competition? Don't resist that. Go with it. Because competition actually equals growth.

[00:19:10] Molly: Yeah. Nice. So there you go. A few different data points to look at there. And this one might be for a broker, but I'll just ask you anyway. We had someone as, as soon as I, um, just got off our Instagram that asked this question, does the amount of kids you have affect the ability to borrow money?

[00:19:31] Arjun: Absolutely it does.

[00:19:33] When you are having kids, you have them labeled as dependents on applications for finance, and as the dependents go up, you do have borrowing capacity things. Now for those with kids that are maturing, maturing, I'm talking about from a financial perspective, perhaps not, uh, life decisions, but um, uh, maturing at 18 is what the bank looks at.

[00:19:57] So if the banks at 18 as a child, they can be marked in some cases as removed as a dependent. 'cause they could be on their own, they might have moved out, they might be hanging out with friends, share house student com, traveling the world, whatever it is. But the main thing is, as soon as someone turns 18.

[00:20:14] The situation has changed, then you can have that removed from a borrowing capacity in past, like there's a few things, like if I was just to rattle off one, like kids are one.

[00:20:23] Molly: Yeah.

[00:20:24] Arjun: Credit card limits are another.

[00:20:25] Molly: Yeah.

[00:20:26] Arjun: And then even another one is your student loans. So they're another one as well. So I think, um, the key is to look at a good holistic check of everything.

[00:20:35] Yeah. It's not like you can check much with the kids there. I think, you know, how many, uh, how many kids are there and not there. I guess the main thing is, um, yeah, like as long as they're under 18, they typically marked as dependence and they do impact your borrowing capacity slightly.

[00:20:50] Molly: Awesome. Well guys that hopefully answered that question for you, and we might just do one last question as well.

[00:20:56] We had someone ask, is it. Still worth taking out a five to 6% loan to buy property in Melbourne. I know that's quite specific, but maybe a bit of a, what you'd say to that person.

[00:21:08] Arjun: Okay, so firstly, Melbourne's a unique city. It is going through a recovery right now, so being able to get into a market like that has its benefits because you're buying at a time where it hasn't grown as much over the last six or seven years.

[00:21:22] It is quite affordable in comparison to other capital cities, and as a result, you could be getting some good upswing, but buyer beware, a 5% deposit also means it's a very high loan commitment. And in a city like Melbourne where the rental yields are some of the lowest amongst all capital cities, your negative cash flow is gonna be higher.

[00:21:43] Mm-hmm. And so you've gotta really start with not what the 5% can do for you, but would you handle two to three K per month Negative cash flow, what that means is if you are not saving over 20 5K per year currently. You might not have a good opportunity to get into that market at those 5% deposits 'cause how are you gonna hold it?

[00:22:03] And so look at reverse engineering the math. If you are saving, say five KA month, four to five KA month as a couple or an individual, then you're doing a phenomenal job. And if someone took away two or three K per month from you and then obviously gave you some back in tax return time, that alone will give you not only buffer but comfort and you could get into our market with much less.

[00:22:24] Makes sense, but if you are only saving one to two KA month and you wanna put that burden in your head, I wouldn't recommend it.

[00:22:30] Molly: Awesome. Thank you so much Arjun. And guys, please shoot me through any questions you have for Arjun and I'll ask him on our next property update. So just go to at Ladies Finance Club and Arjun.

[00:22:42] If people are going, oh my God, I need to speak to your team, where can they go? Yeah,

[00:22:47] Arjun: look, I'm always on LinkedIn, so I would suggest connect with me on LinkedIn. Let's chat, drop me a DM and then I can introduce you to my team as well.

[00:22:55] Molly: Awesome. All right. Thanks so much, Arjun.

[00:22:58] Arjun: Thank you. See you, Molly.

KEYWORDS

property market, first home buyers, investment strategies, mortgage advice, property trends, real estate, market update, financial planning, home buying tips, investment properties