First-home buyer loans reached 125,220 in 2024, growing 5.9% annually—nearly matching the broader owner-occupier loan market’s 6% growth—according to Money.com.au’s new First Home Buyer Mortgage Insights report.
“First-home buyers are always playing catch-up with upgraders who have equity behind them,” said Mansour Soltani (pictured), Money.com.au’s property expert. “But now, that gap is finally starting to shrink. This is partly due to the uptake of state grants and the First Home Guarantee.
“With interest rates falling, we’re likely to see affordability pressures ease, borrowing power improve, and more first home buyers take their shot at homeownership in 2025.”
Looking ahead, first-home buyer loans are projected to rise 6.5% in 2025, reaching 133,308, while broader owner-occupier loans are forecast to grow by 5.3% to 216,210 loans.
Victoria, a top destination for first-home buyers, remained the dominant force in the first-home buyer market, recording an 11% increase in loan numbers in 2024, double the national growth rate of 5.5%. The state also had the highest share of FHB loans, accounting for 32.5% of all new owner-occupier loans.
Queensland ranked second with 6% annual growth, while South Australia followed at 4.6%.
However, some states saw a late-2024 slowdown. Western Australia’s first-home buyer loans dropped 9.9% in the December quarter compared to a year earlier, and New South Wales fell 9.1%. NSW’s annual growth rate slumped to 3.3%, while WA moved into negative territory with a 0.7% annual decline.
The average first-home buyer loan grew by 6% in 2024, adding $30,248 to reach $504,694.
By the end of 2025, the average FHB loan is expected to climb to around $563,000.
Despite growth in loan numbers, a significant borrowing gap persists. The average non-FHB owner-occupier loan is now $698,053—a 31% premium, or $164,987 more, than the average first-home buyer loan of $533,066.
Soltani explained that this is driving many first-home buyers to alternative markets.
“More first-home buyers are looking beyond capital city markets and metro areas to avoid competing with equity-rich buyers for the same properties,” he said. “Many will also turn to the ‘bank of mum and dad’ for help.
“Our research shows that more than one in five Australians under 40 (22%) have either received or expect to receive financial assistance from a parent to buy a home.”
South Australia is emerging as a bright spot for first-home buyers.
First-home buyer loans now make up 34.9% of all owner-occupier loans in the state—the highest share on record.
However, growth in loan numbers remains modest at 5.1%, slightly below the national average.
Soltani noted that reduced competition may create more opportunities for buyers.
“While Adelaide’s median house price recently hit the $1 million mark, there are still plenty of affordable pockets outside of the city and in regional South Australia where first-home buyers can get into the market without taking on excessive debt,” he said.
“The average annual loan size for first-home buyers in South Australia is still below $500,000, so affordability remains a major drawcard.”
Notably, South Australia also has the smallest loan size gap between first-home buyers and the broader owner-occupier market at 18.7%, compared to Queensland’s 25.6% gap today.
The trend of rentvesting—where first-home buyers purchase investment properties rather than a primary residence—continues to gain momentum. First-home buyer investor loans grew by 12% annually, more than double the 5.5% growth seen in traditional FHB owner-occupier loans.
Despite this strong growth, FHB investor loans still make up a modest 4.31% of all investor loans nationally.
New South Wales led with a 20.8% annual increase in FHB investor loans, followed by Western Australia (19.5%) and Queensland (12.7%).
The average FHB investor loan size now stands at $561,343, a 1% increase over the past year, money.com.au reported.
