Lower rates and easing inflation are giving more Australians the confidence to take their first step into homeownership, according to the latest Equifax data.
The release of the latest Equifax Quarterly Consumer Credit Insights – June came on the same day as the Reserve Bank’s widely-expected 25bp rate cut, which lowered the cash rate to 3.60% from 3.85%. The RBA board cited moderating inflationary pressures and a still-tight labour market as key drivers for its unanimous decision.
According to Equifax, intent to apply for a mortgage among FHBs accelerated 9% in Q2 2025. Enquiries through access seekers, such as mortgage brokers, were strongest in South Australia (+10%) and Queensland (+8.2%).
In a sign that this intent is starting to turn into action, application demand among first-home buyers increased by 6.9% in June compared to the same month last year — the first growth in demand in 10 months.
“The recovery in mortgage intent and applications among first-home buyers is encouraging, with demand surging in more affordable capitals like Hobart (+45% in Q2 2025), where growth in average loan amounts is minimal,” said Kevin James (pictured), chief solution officer at Equifax.
“There is continued weakness in most mainland capitals though, with hopeful buyers remaining largely locked out of expensive markets like Sydney and Melbourne where FHB demand has fallen.
“While Australians aged 26-35 remain the most likely to be seeking to buy, we’re also seeing increased activity among the younger cohort of Australians, aged 18-25. This could suggest that government incentives for first home buyers are making a positive impact for these younger consumers.”
Equifax data shows that relatively affordable hubs such as the Central Coast (+20%) are attracting more first-home buyers. However, lifestyle markets including the Gold Coast (-9%) and Sunshine Coast (-17%) are seeing demand drop as prices rise.
While home loan intent is improving, overall consumer credit demand is also climbing. Q2 2025 saw a 14.2% annual increase in unsecured credit applications, driven by buy now pay later (+30.2%), credit cards (+13.4%) and personal loans (+8.5%).
Secured credit applications rose 4.1% year-on-year, with mortgage demand up 4.9% and auto loans up 0.9%.
Outstanding consumer debt is also growing. The value of delinquent mortgage accounts is up 10.1% year-on-year, with credit cards up 9.6% and personal loans up 22.2%.
“The increase in the amount of money in arrears indicates that many consumers are struggling to make payments, particularly on personal loan and mortgage accounts,” James said.
“This trend, coupled with the fact that the number of accounts in arrears remains stable, shows us that people with larger home loans are disproportionately falling into severe delinquency, reflecting growing financial pressure on households with higher-value mortgages.
“The same trend among personal loans could be a sign that people who undertook debt consolidation to manage festive spend on credit cards are now struggling to pay off the money owed, prolonging the pain.”
These trends are reinforced by fresh data from illion’s June 2025 Consumer Stress Barometer, which also points to rising credit default risk – up 3.8% in the first half of 2025 – particularly among renters, low-income families, and younger borrowers.
The latest data suggests a turning point for first home buyers, especially in more affordable markets, but also highlights the financial pressures facing households with larger debts.
With demand for mortgages and other credit products rising, brokers are well positioned to guide clients through lending options and help manage affordability challenges.
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