Upgrader activity eases as buyers adjust to market conditions
First-home-buyer activity has increased to a record 13% of all mortgage approvals in the latest quarter, according to LMG’s National Mortgage Report, marking the highest share since the brokerage group began tracking the metric in 2022.
The shift comes as upgrader activity continues to cool. Approvals for existing homeowners looking to trade up fell to 54% in the latest quarter, down from 62% in late 2022, indicating many borrowers are delaying moves amid higher transaction costs, tight listing volumes and economic uncertainty.
The report draws on lending flows handled by more than 6,000 brokers and covers about 15% of Australia’s mortgage activity, offering a timely view of borrower behaviour.
While total lending remains below pandemic-era highs, the report points to early signs of renewed confidence among borrowers, driven more by purchasing strategies and timing than by interest rate changes, according to LMG.
“First-home buyers are starting to fill the space being left by upgraders,” said Ewen Stafford (pictured), executive director and chief executive of LMG. “It’s giving younger buyers the breathing room they’ve been waiting for, especially in markets where competition has cooled, like Melbourne’s west, Greater Brisbane and Perth.”
LMG noted similar patterns in parts of regional Australia, including Far North Queensland and Hobart, where first-home buyers account for more than one in five approvals. “For many first-home buyers, it’s not just about getting in, it’s about getting in with less pressure and more certainty,” Stafford said.
Rising first-home-buyer share and softer upgrader demand shifts pipelines toward entry-level borrowers. For LMG brokers, that could mean more guidance-heavy files: pre-approvals, scheme eligibility, deposit strategies, and lender policy navigation. With overall volumes still subdued, winning on advice quality, turnaround speed, and product fit becomes a key differentiator.
“Our brokers are helping clients navigate this shift every day, and it’s encouraging to see the data reflect what’s happening on the ground,” Stafford said.
“We’re not seeing a flood of new lending, we’re seeing smarter borrowers,” Stafford said. “And that’s where brokers make the biggest difference. Helping buyers, especially first-timers, find the right loan, and make smart, confident decisions in a complex market, This is exactly where the broker channel shines.”
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