Australia’s first-home buyer segment is driving new dynamics in the residential property market, according to Kevin Brogan (pictured), national director of group risk and compliance at Herron Todd White.
“Australia’s first-home buyer market is a fascinating and influential segment of the residential landscape,” Brogan said. “Demand from new entrants remains robust, and activity is being shaped by affordability challenges, shifting regional preferences, and a renewed focus on housing accessibility.”
Brogan said the federal government’s expansion of first-home buyer assistance has become a key demand driver, shifting from cash grants to more direct financial involvement.
“The shift from grants to more direct financial involvement — including government-backed lenders’ mortgage insurance (LMI) and equity contributions — represents a structural policy change designed to help people into the market sooner,” he said.
These initiatives now enable purchases with deposits as low as two to five per cent, while lifting Home Guarantee Scheme caps and removing place and income restrictions have widened eligibility significantly.
However, Brogan warned that elevated first-home buyer participation can push prices higher when supply remains tight.
“Scheme participants are likely to be concentrated in lower-growth, outer-suburban or unit-dominated markets, where property values have traditionally been more vulnerable to downturns,” he said. “When public funds are directly exposed, ensuring asset quality through comprehensive valuations becomes essential.”
Brogan noted that greater stimulus at affordable price points could reignite investor activity, intensifying competition in already tight market segments.
“Increased stimulus at these price points may also ignite investor markets, given most investors are competing for the same housing as first-time buyers,” he said. “This activity could potentially intensify pressure in these already competitive segments.”
Despite affordability hurdles, first-home buyer demand remains strong in key cities such as Perth, Adelaide, and Brisbane. Many buyers are compromising on location and dwelling type to secure a foothold.
“A notable outcome has been the remarkable uplift in the unit and apartment sector over the past year, especially in older, walk-up blocks,” Brogan said. “Traditionally, attached housing has lagged detached dwellings for capital growth, but the past 12 to 18 months have seen a reversal, with units achieving substantial gains off a lower base.”
Regional markets are also drawing attention due to relative affordability and lifestyle appeal, with entry-level competition growing as both homebuyers and investors look beyond the capitals for value.
Brogan said while policy changes have accelerated access for first-home buyers, they must be managed prudently to maintain long-term financial stability.
“As the market adjusts to changing economic conditions, first-home buyers remain a vital force – motivated, resourceful and increasingly supported by policy settings designed to accelerate their path to ownership,” he said. “But with easier access to finance comes a heightened need for diligence to ensure long-term sustainability for purchasers and the public balance sheet.”
He added: “Supporting homeownership is a worthy national objective, but it must be delivered responsibly.”
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