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Agents have seen first home buyer demand surge following the extension of the 5 per cent deposit scheme, keeping up with the spike by allocating resources wisely and focusing on lower-bracket listings.
A new report showed that first home buyer (FHB) mortgage activity surged in the wake of the government extending its 5 per cent deposit scheme as prospective home owners seek to enter the market.
LMG’s report showed that, in October, first home buyer lodgements rose 49 per cent above the average of the previous six months and increased 41 per cent month-on-month.
In the last quarter of 2025, first home buyer lodgements recorded the largest increase on record, rising 26 per cent quarter on quarter.
The data also showed that, after the immediate October spike, activity slowed in November, before reaccelerating into year-end.
Despite the drop in activity, FHB lodgements for December were still 17 per cent above levels seen in the 6 months prior to the deposit scheme’s expansion.
Across the country, Queensland led the nation for FHB lodgements, recording a 37.0 per cent increase in Q4 compared to previous quarters, and a 61.9 per cent rise month-on-month.
NSW followed with a quarterly rise of 33.2 per cent in FHB lodgements and a monthly spike of 53.7 per cent.
Stone Real Estate Beecroft director, Kevin Dearlove, said FHB demand had strengthened the Sydney market, with any property under $1 million seeing an influx of buyer enquiries.
He said that as first home buyer demand increased, his agency had to shift strategy, ensuring it had enough resources to handle the rise in enquiry levels and focusing on the types of properties being listed.
“From our perspective, obviously, a shift in strategy to listing more properties in that lower price bracket, the properties that are moving with confidence at the moment,” he told REB.
Dearlove said that, in addition to having listings under the million-dollar mark to appeal to FHBs, agents needed to keep up with the high turnover in northwestern Sydney.
“It’s a case of having that particular stock in that segment of the market,” he said.
According to Dearlove, FHB demand in Sydney had primarily increased for apartments in Castle Hill, Epping, Kellyville, and North Kellyville.
“That segment of the market's been most affected, we have seen, probably, a 25 per cent uplift in first home buyers in those segments,” he said.
On the other side of the country, Western Australia and South Australia recorded surges of 21.3 per cent and 29.2 per cent respectively, while Victoria saw the lowest spike in FHB activity with 11.7 per cent growth.
Despite the weaker result, the Garden State continued to have the highest amount of FHB mortgage activity overall.
Dearlove said FHB demand in Sydney was likely to continue despite the RBA’s rate rise, given many buyers in the city were educated about the long-term property market.
“They understand that property is not a short-term fix, it's a medium to long-term play,” he said.
He also said Sydney property was extremely in demand, particularly due to major infrastructure projects such as the Northwest Metro.
“I expect absolute minimal impact from the interest rate increase because buyers are expecting to play a long game. And real estate in Sydney is a long game,” he concluded.
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