According to Money.com.au’s First Home Buyer Mortgage Insights report, first home buyer loans are growing three times faster than other owner-occupier loans, showing a 9.1 per cent increase compared to just 3 per cent for other loan types.
Victoria has established itself as the clear frontrunner, with 36 per cent of all first home buyer owner-occupier loans and recording 14.6 per cent annual growth in loan numbers.
Money.com.au’s Property Expert, Mansour Soltani, said Victoria was appealing to first-time buyers.
“Victoria’s surge in first home buyer loans is driven by a combination of factors, including more affordable property prices compared to New South Wales, particularly Sydney, and a relatively steady housing supply compared to other states,” Mr Soltani said.
The average loan size for first home buyers has reached a historic high of $525,000 nationally, though this remains below the non-first home buyer average of $598,000.
New South Wales continues to present challenges for first-time buyers, with the highest average loan size of $621,000 – a stark 34 per cent higher than Western Australia’s $462,000 average.
Another trend emerging is the rise of ‘rentvesting,’ particularly in New South Wales, where investor loans in the first home buyer segment grew by 31.3 per cent annually – the fastest rate nationwide.
“First home buyers are increasingly entering the property market as investors while continuing to rent in suburbs where they prefer to live,” Mr Soltani said.
“It’s a strategic approach to balancing affordability and lifestyle, as they may be able to borrow more as investors by factoring in potential rental income.”
Nearly one in ten first home buyer loans in New South Wales are now for investment purposes, while Victoria maintains its focus on owner-occupier purchases with fewer than one in twenty loans being investment-related.
Queensland has shown recent momentum, leading quarterly growth with a 4.2 per cent increase in first home buyer loans, followed by Victoria at 2.5 per cent.
Mr Soltani said there was a shifting landscape with first home buyers.
“There’s a balance of affordability and opportunity in Victoria which makes it an appealing destination for first-time buyers entering the property market,” he said.
