First home buyers’ new position in today’s market - John McGrath

First home buyers are facing the same market correction as more experienced property purchasers. Federal Budget investment changes have impacted their situation, as has the national First Home Guarantee, which was expanded in October 2025.

Most buyers also remain cautious as cost-of-living pressures including the ongoing Middle East conflict, continue. But headline inflation has dropped slightly while interest rates have remained unchanged at 4.35% for two consecutive Reserve Bank of Australia meetings.

We’re continuing to experience a very hot rental market with this month’s Home Value Index from Cotality showing the 1.9% national vacancy rate in August is the highest since January 2025.

But there may be some good news in these record high rental numbers with Cotality’s research director, Tim Lawless, noting they may prove a constraint to rents rising further.

There was more good news in the Australian Bureau of Statistics’ latest lending indicator report. While the number of owner-occupier first home buyer loan commitments fell 2.9% in the June quarter, the total value of these loans declined by just 0.2%.