First home buyers accounted for 18.3 percent of all dwellings financed in the most recent lending data, up from 17.8 percent the previous month and notably higher than the equivalent figure a year earlier, as expanded government support schemes continue to lift first-time buyer participation in the market.
The steady climb reflects the combined effect of the expanded First Home Guarantee Scheme’s 5 percent deposit pathway, the new Help to Buy shared equity scheme, and continued strong rental cost growth pushing more renters toward purchasing despite a challenging affordability environment.
What’s Driving the Increase
The total value of housing loans rose 2.4 percent over the latest monthly period, with owner-occupier lending gaining 1.2 percent and investor lending advancing even faster at 4.9 percent. Within that broader lending growth, first home buyers have steadily increased their share of total finance, a trend directly linked to the deposit and equity support schemes that have materially lowered the upfront barrier to entry for eligible buyers.
Why This Matters Beyond the Headline Number
A rising first home buyer share is generally read as a positive signal for housing market accessibility, though economists caution it needs to be read alongside affordability data rather than in isolation. Buyers entering with smaller deposits via government guarantee schemes are also taking on larger loans relative to their income than buyers with larger traditional deposits, which is itself a dynamic regulators including APRA are watching closely as part of broader macroprudential oversight.
How This Compares Internationally and Historically
Australia’s first home buyer participation rate has fluctuated significantly over past decades, often moving inversely with affordability and directly with the generosity of government support schemes at any given time. The current trajectory, sitting around the high-teens percentage of total finance, sits within a historically normal range, though the underlying price levels first home buyers are now entering the market at are substantially higher in both nominal and real terms than in previous decades.
What It Means for the Market Going Forward
A sustained increase in first home buyer activity tends to support demand in the more affordable end of the market specifically, often concentrated in outer suburban and regional areas where entry-level pricing makes government scheme eligibility caps achievable. This dynamic is likely to continue shaping where price growth is strongest through the remainder of 2026, particularly in markets still within reach of expanded scheme price caps.
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