Queensland’s first-home buyer market is picking up pace despite a broader national slowdown, according to the latest First Home Buyer Mortgage Insights report from Money.com.au.
The report revealed that 125,036 first-home buyer (FHB) loans were issued in the year to March, marking a 3.8% annual increase. While this is down from 5.9% growth in the year to December 2024, loan volumes remain 9.1% higher than the September 2023 low of 114,639 – the period when RBA rate hikes peaked.
The broader housing market has also shown signs of recovery in FY25, with residential settlement volumes rising 3.2% and national property values up 9.4% year-on-year, according to PEXA. Two RBA rate cuts in February and May have boosted household sentiment and refinancing activity, contributing to increased borrower participation.
Victoria McGavin (pictured), Money.com.au property expert, said the modest recovery has come in spite of ongoing affordability and lending challenges.
“This modest recovery has been hard-won for first-home buyers, who’ve faced every challenge under the sun the last few years,” McGavin said. “Between rising property prices, high interest rates up until now, tight lending conditions, and historically low housing supply and building approvals, it’s surprising the numbers have bounced back at all.
“It shows that when governments step in with the right incentives – whether it’s increasing First Home Owner Grants or broadening stamp duty concessions, it makes a real difference in helping first-home buyers get on the ladder.”
The Australian Prudential Regulation Authority (APRA) recently confirmed it will retain its 3% mortgage serviceability buffer, citing elevated household debt and accelerating credit growth. The move maintains a layer of constraint on borrowing power for first-home buyers, even as interest rate cuts are expected later this year.
Queensland was the only major state to record an increase in its growth rate, lifting from 6.5% to 6.9% year-on-year.
Annual growth fell in all other major states, although Victoria still leads nationally with a 7.6% increase in FHB loan numbers – down from 10.4% in the previous period.
McGavin attributes Queensland’s momentum to a combination of affordability and rising buyer confidence.
“Queensland is benefiting from interstate migration, relatively better affordability compared to NSW, and renewed buyer confidence, especially among first home buyers who are adjusting to the new interest rate environment,” she said.
“It’s the only major market where first home buyer growth is picking up pace, and that’s being matched by a surge in borrowing power and price expectations.”
Queensland has now overtaken Victoria for the second-highest average FHB owner-occupier loan size, reaching $524,169 – a jump of nearly $55,000 from the previous year’s $469,391. Victoria’s average sits slightly lower at $517,930.
Only Western Australia recorded a larger annual increase, with loan sizes rising 14.1% to $489,894 – up more than $60,000.
Nationally, the average first-home buyer loan has climbed to $538,342, an annual increase of 5.8%.
Victoria continues to lead the FHB owner-occupier market, with an 8.4% annual rise, though slightly down from 11%. Queensland followed with 7% growth, up from 6%.
Overall, the first-home buyer share of the owner-occupier market remains steady at 36%, with Victoria holding the highest share at 40.7%.
While still a smaller segment, first-home buyer investor loans are gaining traction, totalling 7,859 loans annually – now 6.3% of the total FHB loan market. Money.com.au projects this share could reach 10% by 2035 if current trends persist.
“There’s a growing cohort of first-home buyers who understand the tax advantages, rental income potential, and greater borrowing flexibility that come with purchasing an investment property first. It’s becoming more mainstream and less of a niche strategy,” McGavin said.
NSW remains the top state for FHB investors, accounting for 34.7% of national investor FHB loans, despite a slowdown in growth from 21% to 8.8% annually.
Combined, the eastern states – NSW, Victoria, and Queensland – make up 77.2% of the FHB investor market, with the remaining states holding just 22.8%, Money.com.au reported.
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