First-home buyers are impacting Australia’s housing market significantly through government schemes and tax benefits, leading to rising prices. Terry Ryder, founder of Hotspotting, indicates that these buyers are a dominant force, supported by federal and state backing. These buyers enjoy several advantages. Federal schemes allow a mere 5% deposit without incurring Lenders Mortgage Insurance. In New South Wales, a stamp duty waiver for properties up to $700,000 offers further financial relief. Various states and territories provide grants for purchasing or building new homes.

Recent data from the Australian Bureau of Statistics reveals a 7% rise in loans to first-home buyers, marking the highest quarterly increase since 2023. In New South Wales, this increase reached 11%, indicating a surge in lending to newcomers in real estate.

Ryder challenges the idea that first-home buyers are “locked out” of the market, stating that while high prices present challenges, government support facilitates access. The current market shows medium-level price growth nationwide due to supply shortages alongside strong demand driven primarily by first home buyer activity.

Ryder also mentions potential risks in changing Capital Gains Tax and negative gearing rules, highlighting the importance of small investors who supply over 90% of rental homes in Australia.

These selections are based on solid fundamentals, including strong local economies, infrastructure investments, and low vacancy rates, according to Hotspotting General Manager Tim Graham.

The report emphasises the potential for cashflow-positive outcomes without sacrificing long-term capital growth.

“These are not speculative picks,” Hotspotting General Manager Tim Graham said.

“They’re backed by real fundamentals, including strong local economies, infrastructure investment, and low vacancy rates.

“We’re identifying locations where investors can achieve cashflow-positive outcomes without sacrificing long-term capital growth.”

Strong Markets

Examples include Park Avenue in Rockhampton, which experienced a 29.1% annual price increase, and Lismore in New South Wales, surging 26.8% despite flood recovery efforts. Washington Brown Director Tyron Hyde notes that these markets are resilient and attract strategic investors focused on long-term growth rather than short-term returns.

“These markets are resilient, affordable, and on the move,” Mr Hyde said.

“They’re attracting investors who are thinking strategically and not just chasing short-term returns, which is always a bad idea.”

Regions like Victoria’s Red Cliffs and Mooroopna, as well as Northern Territory’s Moulden and Rosebery and Tasmania’s Ravenswood, signify a shift towards regional centres with increasing demand and infrastructure development.