Looking at the Challenges for First Home Buyers in Australia

Looking at the Challenges for First Home Buyers in Australia

By: Nfinity Financials0 comments

The issue of first home buyers in Australia has recently caught attention due to the recent data, which is well worth considering to comprehend this market’s fundamentals. Based on statistics, a recent review conducted provides valuable insights into the difficulties and patterns affecting first-home buyers.

Rising Prices vs. Flat Wages

In the last twenty years, the price of housing in Australia has exploded dramatically, with the CoreLogic Home Value Index skyrocketing by about 150%. On the other hand, wages have increased by just 82%. This gap has not only led to more difficulty for those who are seeking their first houses but also led to a higher average age of such individuals purchasing them as a result of the decline in affordability and home ownership proportions.

Understanding the Rise in First Home Buyer Finance

February lending indicators seem to have brought a positive development; the total value of first home buyer finance secured rose above $4.9 billion, representing an increase of 4.8% from the previous month. This is quite a significant increase, especially given high interest rates and the overall economic environment. Since August 2022, there has been an upward trend in the proportion of all owner-occupied finance which can be attributed to first home buyer finance—up to 29.2%, or greater than any other decade average.

This does not necessarily mean that it has become easier for first-home buyers wanting to get into the property market. The reason their share of loans has gone up might be because there is less borrowing by people who already own homes or are buying additional properties. In fact, over the past year, the amount of money lent to first-home buyers has grown by 20.7%, which is much faster than the 5.0% growth in lending to other home buyers.

An important finding is the impact that short-term government incentives have on first-home buyer participation. The first homeowner grant deployed at the time of the Global Financial Crisis accounted for the surge seen in 2009-10, while the HomeBuilder grant during the pandemic led to the spike observed in 2020-21. To the extent that these programs are temporary, they can be effective in pushing more people into the property market, but at the same time probably inflate prices and competition. This could end up not helping first-home buyers over time.

Looking Beyond the Numbers

While providing some insight into the mortgage market, the monthly finance data falls short in terms of the more pressing issues facing the current first home buyer. It is important to consider both the increase in the number of loans typically issued in any given period, the increase in total loan values, and the contribution of rising home prices.

Furthermore, when we focus on first-home buyers within the 25-34-year-old age group, there’s been a slight drop in their numbers over the past ten years, even though there have been some recent gains.


Australia’s housing market is complicated, especially for first-home buyers. While recent data is very useful for seeing trends in mortgages, we need to look at more than just these numbers. It’s important to consider homeownership rates by age and income, and also adjust loan numbers based on population changes for a full understanding. As the market changes, we need to keep analyzing to better support first-home buyers.

Seeking more insights on the Australian housing market? Nfinity financials has got your back. Read our articles or book a Discovery Call at 1300 GET LOAN today.

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