National loan numbers remain sluggish, though government incentives have helped keep market afloat
Australia’s first-home buyer (FHB) market was sluggish in the 12 months to March 2025, although generous government incentives helped to stem further slowdowns across most states.
According to the latest Money.com.au First Home Buyer Mortgage Insights report, a total of 125,036 FHB loans were issued in the year to March 2025.
While annual growth slowed to 3.8% from 5.9% in December 2024, loan numbers remained 9.1% above the 2023 low, when the Reserve Bank of Australia (RBA)’s rate hikes were in full swing.
“This modest recovery (since 2023) has been hard-won for first home buyers, who’ve faced every challenge under the sun the last few years,” said Victoria McGavin, property expert at Money.com.au.
Those challenges have been manifold – soaring property prices, high interest rates, conservative lending appetites and short housing supply, among others.
As such, “it’s surprising the numbers have bounced back at all”, said McGavin, adding: “It shows that when governments step in with the right incentives – whether it’s increasing First Home Owner Grants or broadening stamp duty concessions, it makes a real difference in helping first home buyers get on the ladder.”
Queensland stood out as the only major state to record an increase in its growth rate, rising from 6.5% to 6.9% year on year.
“Queensland is benefiting from interstate migration, relatively better affordability compared to NSW, and renewed buyer confidence, especially among first home buyers who are adjusting to the new interest rate environment,” McGavin said.
Indicative of Queensland’s strength, the state’s capital Brisbane recently became Australia’s latest million-dollar city, with the median house value rising to $1,011,000 in June.
The Sunshine State also overtook Victoria for the second-highest average owner-occupier loan size for first home buyers, now at $524,169 – a jump of nearly $55,000 in a year. Nationally, the average loan size has hit $538,342, up 5.8% over the past year.
While Victoria continued to lead in annual growth rate for FHB loans, up 7.6% to 40,063, this was a marked slowdown from the 10.4% growth rate in the previous period.
New South Wales, meanwhile, dominated the investor segment, accounting for over a third of FHB investor loans nationally.
According to McGavin, FHBs are increasingly considering the benefits of rentvesting as a strategy.
“There’s a growing cohort of first home buyers who understand the tax advantages, rental income potential, and greater borrowing flexibility that come with purchasing an investment property first. It’s becoming more mainstream and less of a niche strategy,” she said.
