New research from Cotality suggests that the federal government's Home Guarantee Scheme, which allows first home buyers to purchase with a 5% deposit and government guarantee, is contributing to a surge in prices at the lower end of the housing market. This has led to concerns that the scheme may be worsening entry-level affordability. The scheme has driven prices up by 6.7% in the first six months, nearly double the 3.6% increase for higher-priced properties. Experts warn that the scheme may boost home ownership rates in the short term, but ultimately worsen affordability by increasing demand without addressing supply.