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First-time property buyers have been resourceful, utilising grants and incentives to enter the market, while recent rate cuts are boosting opportunities as agents anticipate the next wave.
A new report has found that first-time property buyers have been finding ways to enter the market despite harsh conditions; however, their outlook is expected to be further improved due to recent rate cuts.
The PropTrack and CommBank First Home Buyer Report 2025 revealed that there were more first home buyers in the past year than was typical during most of the early to mid-2010s.
Despite a surge in mortgage rates in recent years and housing affordability plummeting, first-property buyers have used a range of methods to secure a deposit and buy their first house.
The tactics include taking advantage of government grants, low-deposit schemes, and lender’s mortgage insurance.
Additionally, some buyers have been able to purchase their properties with smaller deposits.
According to CommBank, the average loan-to-value ratio for a first home buyer is around 85 per cent, meaning that many first home buyers buy with a deposit of less than 20 per cent.
Furthermore, another way first-time property buyers have used to get a foothold in the market is by buying in more affordable areas or purchasing apartments instead of houses.
According to the report, Melbourne has been overwhelmingly popular among first-time property buyers, with four of the top five hotspots being Maroondah, Brimbank, Casey’s north, and Knox.
“The over-representation of first home buyers across Melbourne is consistent with Melbourne’s relative affordability compared to other major capitals,” the report noted.
REA Group senior economist, Angus Moore, said that saving for a deposit is the key challenge for first home buyers, creating a massive savings burden.
“On top of this, record low housing affordability and tough mortgage serviceability have been significant challenges. Despite these conditions, first home buyers are finding ways to enter the market,” he said.
“Recent government policies, low-deposit loans, and lender’s mortgage insurance are key enablers helping first home buyers purchase.”
However, Moore said that good news is on the way for first property buyers, with conditions set to improve.
“Interest rates have already fallen from their peak, and further cuts are expected,” he said.
“While home prices are rising, lower mortgage rates will likely help put more homes within reach of first home buyers,” he concluded.
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