This is how much first-home buyers need to borrow to get into the property market


Dec 09, 2024
New Daily

While there is more assistance for first-home buyers it's still tough to get into the market.



First-home buyers need to borrow more than half a million dollars to get into a property across Australia, according to a new report.

Nationally, the average first-home buyer loan figure sits at $536,561, according to the Real Estate Institute of Australia (REIA) Housing Affordability Report.   


REIA President Leanne Pilkington said first home buyers were often seen as a bellwether for market conditions overall.

“The average loan size for first-home buyers increased to $536,561, representing a 0.8 per cent rise over the quarter and a notable 6.7 per cent jump over the past 12 months,” Pilkington said.

NSW first-home buyers took out the biggest loans in the September quarter, with an average loan size of $624,681.

But states where property prices had seen the biggest growth were now also battling strong growth in the size of the loans that first-time home buyers need to take out.

Rise in the west
Western Australia saw the most significant rise in loan size for first-home buyers, up by 14.9 per cent.

That compares to a much more modest 2.1 per cent growth in home loan size in NSW.

Tasmania was the only state where the average first-home buyer loan had shrunk, dropping by -2.5 per cent this year.



PRD Chief Economist Dr Diaswati Mardiasmo said affordability for first-home buyers was now an issue nationwide.

“For a long time, NSW and Victoria were leading in becoming more unaffordable for first home buyers, and Queensland, South Australia and Western Australia were known as the cheaper alternative. Now they are becoming more unaffordable,” Mardiasmo said.

She said that while there was more assistance for first-home buyers to enter the market, it was still tough for those buying their first property.

“There is more help for first home buyers now, both from the government through the Help to Buy Scheme and even some developers are offering cash back incentives,” Mardiasmo said.

“However, at the same time, we have more competition than ever from investors and other buyers,” she added.

Affordabiilty woes
Meanwhile, the REIA report showed that it was not just first-time home buyers who were struggling with housing affordability, which hit a historical low during the September quarter.

It found that the proportion of median family income required for average loan repayments climbed to 48.6 per cent, an increase of 0.4 per cent from the previous quarter.

Pilkington said there was a growing burden on Australian households trying to pay off loans.   

“The figures underscore the persistent challenges faced by families striving to enter the housing market or manage their existing commitments,” she said.

“Rising mortgage sizes coupled with stagnant variable interest rates continue to push affordability further out of reach.”

Pilkington said that the affordability crisis persists despite the Reserve Bank of Australia maintaining the cash rate at 4.35 per cent and a stable quarterly average standard variable interest rate of 8.8 per cent.

“The quarterly average three-year fixed interest rate saw a slight decrease of 0.5 percentage points to 6.3 per cent, but this has done little to alleviate the mounting pressures on borrowers,” she said.