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30 Ways To Pay OffFirst-home buyer loans are on the rise, with a significant surge expected in 2025. According to a recent report by Money.com.au, first-home buyer loans reached 125,220 in 2024, growing at a rate of 5.9% annually, nearly matching the broader owner-occupier loan market’s growth rate of 6%. Mansour Soltani, Money.com.au’s property expert, attributes this growth to state grants and the First Home Guarantee, stating that the gap between first-home buyers and upgraders is starting to narrow.
Soltani predicts that with falling interest rates, affordability pressures will ease, borrowing power will improve, and more first-home buyers will enter the market in 2025. Projections indicate a 6.5% increase in first-home buyer loans, reaching 133,308, while broader owner-occupier loans are expected to grow by 5.3% to 216,210 loans.
Victoria leads the national growth in first-home buyer loans, with an 11% increase in loan numbers in 2024, double the national growth rate of 5.5%. Queensland follows with a 6% annual growth rate, and South Australia emerges as a top market with a 4.6% growth rate. However, Western Australia and New South Wales experienced a slowdown at the end of 2024, with both states seeing a decline in first-home buyer loans.
The average first-home buyer loan grew by 6% in 2024, reaching $504,694. By the end of 2025, this figure is expected to climb to around $563,000. Despite the increase in loan numbers, there remains a significant borrowing gap between first-home buyers and non-first-home buyers. The average non-first-home buyer loan is $164,987 more than the average first-home buyer loan, driving many first-home buyers to explore alternative markets.
More first-home buyers are looking beyond capital city markets and seeking financial assistance from family members to enter the property market. The ‘bank of mum and dad’ is estimated to be worth about $35 billion, positioning it among the top 10 mortgage lenders in the country. South Australia stands out as a promising market for first-home buyers, with first-home buyer loans accounting for 34.9% of all owner-occupier loans in the state.
Rentvesting, where first-home buyers purchase investment properties instead of primary residences, is gaining traction. First-home buyer investor loans grew by 12% annually, more than double the growth rate of traditional owner-occupier loans. Despite this growth, first-home buyer investor loans represent a modest percentage of all investor loans nationally.
In conclusion, the landscape for first-home buyers is evolving, with South Australia emerging as a standout market and rentvesting becoming a popular trend among new buyers. As the property market continues to shift, first-home buyers are adapting to new strategies to achieve homeownership.
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