Government support and affordability drive demand in outer suburbs
The Reserve Bank of Australia’s recent decision to keep interest rates unchanged has not dampened activity among home buyers, according to industry data. While many in the market had anticipated a rate cut, momentum in property purchases has continued through the winter period, a season typically marked by lower activity.
“Many house hunters would have been hoping for a midwinter cut, but despite this disappointment, we’re seeing momentum continue through the winter months, which are traditionally a little quieter,” said Denton Pugh (pictured), executive for home lending at NAB.
The bank’s figures show that auction participation has reached its highest level in a year and a half, signalling increased buyer interest ahead of the usual spring surge. The bank expects further rate reductions later in the year, which could encourage more first-home buyers to enter the market.
Government initiatives remain a significant factor in supporting new buyers. The Home Guarantee Scheme, which allows eligible Australians to purchase homes with smaller deposits, is set for expansion in 2026. Recent policy changes in Queensland and Western Australia have also eased entry for first-home buyers. In Queensland, eligible buyers of new homes are now exempt from stamp duty, regardless of property value, and a new shared equity scheme has been announced. Western Australia has introduced greater stamp duty concessions, reducing upfront costs for buyers.
Pugh noted that many customers are realising they can access the property market sooner than expected after consulting with lending specialists. “If you’re in that camp, thinking about buying but not sure where to start, it’s worth having that conversation,” he said.
NAB’s lending data from January to May 2025 highlights a trend towards outer metropolitan areas, with Truganina in Melbourne ranking as the most popular suburb for home buyers so far this year. Five of the top 10 metro suburbs are located in Melbourne’s outer ring, with others in Sydney and Perth also attracting strong demand.
“Affordability is the obvious driver, especially for first-home buyers,” Pugh said. “Many are looking further out where their money buys more, and they don’t have to compromise on space and lifestyle. Many of these suburbs are now better connected thanks to major infrastructure investments, with just a short commute to the CBD.”
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