First Home Buyer: Guide for New South Wales

Buying your first home in New South Wales remains a significant milestone, but government incentives and evolving market conditions are helping more Australians take their first step onto the property ladder.

Based on the latest McGrath Research First Home Buyer Report, first home buyer activity continues to account for a growing share of owner-occupier lending despite higher interest rates, supported by affordability-focused initiatives and strong demand for entry-level housing.

Over the past decade, the share of owner-occupier loans taken out by first home buyers in NSW has risen from 16% to 34%, highlighting the increasing role this buyer group plays in the housing market. Loan commitments to first home buyers increased 4.7% year-on-year to 28,970 in the year to Q1 2026, demonstrating continued demand despite elevated borrowing costs.

Affordable Housing Demand Continues to Drive Competition

Strong demand for affordable homes, combined with limited housing supply and population growth, has contributed to price growth in the lower end of the market. During the year to Q1 2026, average prices in the lowest 25% of Sydney house values increased 11% to $1.125 million, while Sydney apartments rose 3% to $641,000. In regional NSW, apartment prices increased 10% and house prices grew 7% over the same period.

Government Incentives Available to NSW First Home Buyers

A range of state and federal initiatives can help eligible first home buyers reduce upfront costs and enter the market sooner, including:

First Home Buyers Assistance Scheme (FHBAS): offering stamp duty exemptions on homes valued up to $800,000 and concessions on homes valued up to $1 million.

First Home Owner Grant (FHOG): providing a $10,000 grant for eligible new homes.

First Home Guarantee (FHG): allowing eligible buyers to purchase with a 5% deposit without paying Lenders Mortgage Insurance (LMI).

Help to Buy: enabling eligible buyers to purchase with as little as a 2% deposit through a shared equity arrangement with the government.

First Home Super Saver Scheme (FHSSS): allowing eligible buyers to use voluntary superannuation contributions towards their first home deposit.

Key Takeaway for First Home Buyers

While affordability remains a challenge across many NSW markets, a combination of government support, deposit assistance programs and stamp duty concessions can significantly lower the barrier to entry for eligible buyers. Before purchasing, buyers should carefully research available grants and schemes, budget for additional costs such as legal fees, inspections and loan establishment charges, and seek advice from qualified professionals to ensure they understand their obligations and opportunities.

Read the full McGrath NSW First Home Buyer Guide for detailed insights into grants, eligibility requirements, purchasing costs and pathways to home ownership.

Learn more: McGrath Research | First Home Buyer Report | NSW