Investor activity and high entry costs continue to hinder first-home buyer access
First-home buyers in New South Wales are facing the toughest conditions in the country, according to new findings from Loan Market Group.
The company’s National Mortgage Report indicates that only 8% of loans settled in NSW during June were for first-home buyers, a figure significantly lower than the nearly 40% of loans settled by investors over the same period.
The report highlights that competition from investors is intensifying the difficulties for those attempting to enter the property market for the first time.
“First home buyers and investors often compete for similar stock and with a shortage of properties on the market… prices have risen,” said David McQueen, chief executive officer at Loan Market. “Even though rates are easing and real incomes are improving, affordability and the time taken to save up for a deposit has made entry into Sydney and major regional property markets difficult for first-home buyers.”
Nationally, first-home buyers represented around 13% of all loans, with NSW purchasers accounting for just 18% of first-home buyer loans across Australia, despite the state’s large population. The report also found that Victoria and Queensland accounted for a larger share of first-home buyer loans, at 39% and 21% respectively.
Many younger buyers are now looking beyond central Sydney, with areas such as Greater Western Sydney becoming increasingly popular for first-home purchases.
Recent advocacy by the Real Estate Buyers Agents Association of Australia has called for stamp duty concessions for homeowners aged 60 and over, aiming to encourage downsizing and increase the supply of homes available to first-home buyers.
Katie Stevenson, executive director of Property Council NSW, emphasised the importance of innovation in construction to meet housing targets.
“NSW needs more homes, faster, but the new housing we need is being delivered at one of the slowest rates in a decade – and this construction challenge extends beyond residential into commercial and industrial projects,” Stevenson said.
“Modular and prefabricated construction can cut build times by up to 50%, reduce waste, lower on-site emissions and improve quality. It’s the kind of breakthrough we need if we’re serious about meeting housing and infrastructure targets. If we want to hit our housing and infrastructure goals, we need practical changes to regulation, finance and procurement that unlock delivery at scale.”
The NSW government currently offers two schemes to support first-home buyers: the First Home Buyers Assistance Scheme and the First Home Owner Grant (New Home). The Assistance Scheme provides full or partial transfer duty exemptions for homes valued under $1 million, provided buyers move in within 12 months of settlement and remain for at least a year. The First Home Owner Grant (New Home) offers $10,000 towards the purchase of a new property, with eligibility restricted to homes valued at $600,000 or less that have not previously been occupied, and similar residency requirements.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
