The suburbs first-home buyers are flocking to

One in every three properties bought by a first-home buyer over the past year had the federal government go guarantor, as rising property prices and surging costs make it harder to save a 20% deposit.

And they’re buying in very specific places according to the data, primarily in the outer suburbs of capital cities or regional towns.

According to PropTrack, housing affordability is at its worst level in at least three decades, presenting a tough quandary for first-home buyers: escalating property prices necessitating larger deposits coupled with high interest rates that limit borrowing capacity and increase repayments.

PropTrack senior economist Angus Moore said there’s been a significant drop in total first-home buyer numbers across the country compared to previous years.

“In 2021, around 160,000 first-home buyers were successful, but we saw about 30% fewer in 2022 as interest rates rose, and it’s looking to be about 10% to 15% fewer again this year, which is more in line with pre-pandemic figures,” Mr Moore said.

“First-home buyers are particularly constrained by financing conditions and the data shows us that they’re mostly buying in these outer suburban, more affordable areas.”

Affordable regional towns like Tamworth in New South Wales Australia have been popular with buyers using the Home Guarantee Scheme. Picture: Getty

---

This deterioration in housing affordability has seen a higher proportion use the government’s Home Guarantees Scheme to get onto the property ladder – up from one in seven during the 2012-2022 financial year, or around 23,300 guarantees in total – to nearly one in three in 2022-2023 with around 41,700 Australians using the scheme to buy a home.

Jump to see where first-home buyers are purchasing

The scheme – which includes the First Home Guarantee, Family Home Guarantee and Regional First Home Buyer Guarantee – allows eligible buyers to purchase a home with a small deposit, such as 5%, without needing to take out lenders mortgage insurance (LMI).

While the Family Home Guarantee is not exclusive to first-home buyers, eligible single parents must not currently own property to participate.

To qualify for the scheme, individuals can earn up to $125,000 and couples up to $200,000, with varying property price caps based on location.

But even with the deposit barrier lowered, Sydney buyers agent Michelle May estimates at least 70% of her first-home buyer clients are tapping into the bank-of-mum-and-dad to help with the deposit, agent fees or mortgage repayments.

What they’re buying

Recent data from Housing Australia – formerly the National Housing Finance and Investment Corporation – shows first-home buyers supported by the Home Guarantee Scheme prefer larger, family-sized homes, with 68% of purchases having three or more bedrooms.

“Houses are very common among first-home buyers, which is just the fact that houses are most of the housing stock in Australia,” Mr Moore said.

“But first-home buyers are more likely to purchase apartments than other purchaser types, which makes sense.”

While family homes were the most popular, many first-home buyers purchased units in the capital cities. Picture: Getty

---

Single buyers, however, opted for smaller properties, with 90% of one-bedroom properties and 75% of two-bedroom homes purchased by singles.

Ms May said her first-home buyer clients were more likely to compromise on space than location.

“First-home buyers are not giving up. They’re just compromising,” she said.

“The demand for three-bedroom apartments is out of this world. The kids may have to share a bedroom so they can use the third bedroom as an office.”

Where they’re buying

The strongest uptake was in regional Queensland as well as the outer suburbs of Brisbane, Perth, Sydney and Melbourne, according to Housing Australia’s fourth annual Home Guarantee Scheme Trends and Insights Report for the 2022/2023 financial year.

New South Wales

In NSW, most users flocked to Sydney’s southwest. The 2170 postcode, which captures Liverpool, attracted 166 buyers through the scheme, while the postcode 2560, capturing Campbelltown drew 142.

Homes in Sydney’s south west and far west were popular with buyers using the guarantee scheme in 2022-23. Picture: realestate.com.au

---

The average purchase price for those using the scheme in Greater Sydney was $652,510, compared to a median Sydney property value of $1,070,000, according to PropTrack’s Home Price Index.

“Sydney’s house and unit prices are growing further out of reach for most first-home buyers,” Ms May said.

“Even with a healthy budget of $900,000 – the price cap for buyers taking advantage of the scheme in Sydney  – they’re priced out of most suburbs. So we’re seeing them go further and further out, many to suburbs 40km away from the CBD.”

Top NSW postcodes with buyers using the Home Guarantee Scheme

Uptake of the scheme was also strong in the regional town of Tamworth, which recorded 117 purchases through the scheme in the 2022-23 financial year.

Local agent Mark Sleiman at PRD Tamworth said the town has always attracted plenty of first-home buyers.

“It’s affordable; you can get a home here for $500,000. That’s a much more achievable outcome in today’s high interest rate market than what you’d find in, say, western Sydney.”

Victoria

In Melbourne, where the median property price is $815,000, buyers paid an average of $537,870.

The highest number of purchases (185) were in postcode 3064 around Craigieburn in the city’s outer north, while 177 bought in 3029 around Hoppers Crossing in the southwest. Outer Melbourne suburbs filled out the top 10 while 71 users bought in Ballarat.

Top Vic postcodes with buyers using the Home Guarantee Scheme

Agent Romi Sleiman at Barry Plant Craigieburn said 80% of buyers in his area were buying their first home, attracted by its affordability. Most snapped up townhouses and single-storey homes.

“They’re getting their foot in the market, then they sell up in a few years after they’ve made a bit of money, and move closer into the city again.”

Queensland

The Coral Coast town of Mackay saw 286 purchases, more than anywhere else in the country, with postcode 4207 around Beenleigh southeast of Brisbane attracting 216, postcode 4350 around Toowoomba pulling 202 and postcode 4305 around Ipswich, 182.

While the median property value in Queensland is $622,000, those using the scheme paid an average of $400,245.

Top QLD postcodes with buyers using the Home Guarantee Scheme

Agent Robyn Faa at Mackay Regional Real Estate said Mackay had seen consistently high levels of first-home buyers over the last 12 months.

“Our first-home buyers are mainly local and they’re predominantly chasing houses over apartments. Anything selling under $500,000 is particularly popular.”

South Australia

In South Australia, six of the top 10 postcodes for users were in Adelaide’s far northeast or southwest. While the city’s median property value is $697,000, those using the scheme paid an average in Greater Adelaide of $434,801.

Top SA postcodes with buyers using the Home Guarantee Scheme

The highest number of guarantee purchases (55) were in postcode 5114 around Smithfield,  while 47 were in postcode 5162 around Morphett Vale. The regional town of Mount Barker, around 30km southeast of Adelaide, attracted 41 scheme users.

Western Australia

WA recorded some of the highest numbers of purchases in the country, with the outer suburbs of Perth especially popular.

Suburbs in the postcode of 6112 were most popular with buyer’s using the Home Guarantee Scheme in WA. Picture: realestate.com.au

---

In the city’s south, postcode 6112 around Armadale, postcode 6171 around Baldivis, and 6164 around Jandakot attracted 219, 181 and 178 buyers respectively.

Home Guarantee Scheme users in Greater Perth paid an average price of $377,006, compared to the city’s median property value of $604,000.

Top WA postcodes with buyers using the Home Guarantee Scheme

Aman Singh at The Best Realty Group said the area around Armadale had seen “a massive influx of first-home buyers”.

“A good number are moving interstate from Sydney and Melbourne because their budget can go so much further,” he said.

“They’re buying three-bedroom homes with land, and they don’t care if it’s renovated or not. With such a lack of stock, they just want a roof over their head and they might renovate down the line.”

Tasmania

In Tasmania, the northern cities of Devonport and Burnie both welcomed 35 buyers, more than anywhere else in Tasmania.

Top Tas postcodes with buyers using the Home Guarantee Scheme

Buyers using the guarantee scheme on the island paid an average of $371,572, well below Tasmania’s median property value of $498,000.

Northern Territory

The median property value in the NT is $429,000, while buyers paid an average of $393,843.

The highest number of them (80) purchased in postcode 0832 around the Palmerston suburb of Zuccoli, southeast of Darwin, while closer to the capital, postcode 0810 around Nightcliff and Coconut Grove attracted 37 buyers.

Top NT postcodes with buyers using the Home Guarantee Scheme

Australian Capital Territory

In the ACT, where the median property value is $848,000, buyers using the scheme forked out an average of $558,559.

The most popular suburbs were west of Canberra’s CBD: postcode 2611 around Weston Creek attracted 67, while postcode 2617 around Belconnen, 63.

Top ACT postcodes with buyers using the Home Guarantee Scheme