NSW the toughest state for first-home buyers

NSW is the hardest property market for first-home buyers to crack, new research from Loan Market Group has revealed.

The group’s National Mortgage Report showed first-home buyers accounted for only 8 per cent of all NSW loans settled over June.

This was well below the proportion of loans settled by investors, which accounted for nearly 40 per cent of NSW loans issued over the period.

Loan Market CEO David McQueen said the resurgence of investors meant increased competition for first-time buyers.

“First home buyers and investors often compete for similar stock and with a shortage of properties on the market … prices have risen,” he said.

Loan Market CEO David McQueen. Picture: Supplied.

Nationally, first-time purchasers accounted for about 13 per cent of loans, according to the Loan Market data.

NSW buyers were behind only 18 per cent of the total first-time purchaser loans issued nationally – despite the state being by far the most populous.

Mr McQueen said the upfront costs of buying have made the conditions of entry that much more difficult for first time buyers, especially in the nation’s most expensive capital.

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Where are the first home buyers in Australia? Via Loan Market Group’s August 2025 National Mortgage Report.

“Even though rates are easing and real incomes are improving, affordability and the time taken to save up for a deposit has made entry into Sydney and major regional property markets difficult for first-home buyers,” he said.

The report found it was easier for first-home buyers elsewhere on the east coast, with Victoria accounting for 39 per cent of national first-home buyer loans and Queensland making up 21 per cent.

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FHB loans as a proportion of all loans by state. Via Loan Market Group’s August 2025 National Mortgage Report.

Late last month the Real Estate Buyers Agents Association of Australia lobbied for Aussie homeowners aged 60-plus to be given a stamp duty concession to encourage them to downsize from larger homes, creating more available stock for first-home buyers.

Many young buyers are now gravitating towards areas beyond the city such as Greater Western Sydney for their first home.

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First-home buyers Laura Crambrook and Jack Dennis said they chose to buy in Western Sydney for the cheaper prices. Picture: Thomas Lisson.

What grants can first home buyers get in NSW?

There are two schemes offered by the NSW Government for first-home buyers: The First Home Buyers Assistance Scheme and the First Home Owner Grant (New Home).

The First Home Buyers Assistance Scheme offers full or partial exemption on transfer duty for first-home buyers, requiring that the value of the home must be less than $1m and that the buyer must move into the property within 12 months from settlement and live there for at least 12 continuous months.

The First Home Owner Grant (New Home) offers $10,000 towards the purchase price of a new home, in addition to the benefits of the First Home Buyers Assistance Scheme.

The grant requires the property to be a new home that no one has lived in before, worth no more than $600,000.

As with the assistance scheme, buyers must also move into the property within 12 months from settlement and live there for at least 12 continuous months.

More information can be found via Revenue NSW.

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