Treasury Home Guarantee Scheme Modelling

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Treasury modelling of Home Guarantee Scheme (HGS) changes, conducted in August 2025, estimated a 0.6 per cent increase in national dwelling prices over the medium term. The analysis assumed HGS changes would generate 16,000 additional first-home buyer households in the first year and 3,100 annually thereafter, creating a demand shock against a dwelling stock of 11.2 million. Treasury used its own housing system model (updating Saunders and Tulip 2019) to estimate price elasticity, finding housing prices more sensitive to demand changes than comparable estimates. The modelling incorporated supply-side responses already embedded in elasticity estimates and factored in the income effect from savings on lenders mortgage insurance. Treasury recommended acknowledging that different modelling approaches (including estimates from Lateral and Grattan) yield varying results rather than disputing alternative findings.