First-home buyers driving Australia’s rising housing prices

In Short:
– First-home buyers are influencing Australia’s housing market through government support, leading to rising prices.
– They benefit from lower deposits, stamp duty waivers, and grants while also driving demand in regional areas.

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.