Australia’s first home buyers are still taking out loans as property investors step back, data shows
The Guardian · 2026-08-23
First home buyers are increasingly driving Australia's property market, becoming the sole cohort making more loan applications amid rising interest rates and tax changes, while investors step back. Data from Loan Market shows first-timer applications rose 10% into the first half of August after a 3% drop in July, contrasting with steady applications from other owner-occupiers and investors. The Australian Bureau of Statistics reported a national fall in home loan demand by 5.4% by June, but investor loans dropped 8.6% compared to only 2.9% for first-time buyer mortgages on a seasonally adjusted basis.
Property finance firm 13x CEO Peter Esho notes a sentiment shift, with first home buyers feeling the market has turned in their favour due to "pent-up demand" and policy drivers. Demand concentrates on properties near government 5% deposit scheme eligibility caps, allowing first-time buyers to borrow up to 95% with a government guarantee, waiving costly lenders’ mortgage insurance (LMI). This scheme, expanded by Labor, has seen over 320,000 people become homeowners since 2020, collectively saving more than $2.5bn in LMI by July. Housing Australia recorded over 5,000 new guarantees monthly since February, with ANZ, a participant in the scheme, maintaining steady mortgage applications as first home buyers offset other lending drops.
*The full article also explores the impact of the scheme's expansion on LMI companies and regional price caps for eligible properties.*