Australia’s property market remains a tough nut to crack for first home buyers (FHBs), with affordability, lifestyle preferences, and market dynamics steering where they choose to buy. As of March 26, 2025, data from the Australian Bureau of Statistics (ABS), CoreLogic, and industry reports paints a clear picture: FHBs are flocking to outer suburbs and select regional hubs. But with the federal government’s expanded Help to Buy scheme rolling out later this year, we could be on the cusp of a seismic shift in FHB hotspots—and prices. At Futurerent, we’re diving into where FHBs are active today and how this policy might supercharge demand, potentially inflating prices in key markets.
Where FHBs Are Buying Now
FHBs typically balance cost with convenience, gravitating toward areas where median prices fit their budgets—think $500,000-$900,000 for units or $700,000-$1.2 million for houses. Nationally, they snap up 120,000-135,000 properties annually (2024 estimate), with 60-65% of purchases in capital cities and the rest in regional areas. Post-COVID, regional buying peaked at 42% of FHB loans in 2021 (ABS), but cities still dominate due to jobs and infrastructure.
- Sydney, NSW: FHBs target Western Sydney (e.g., Blacktown, Penrith) and the South-West (e.g., Campbelltown, Liverpool), where houses range from $900,000-$1.2 million and units hover around $600,000-$750,000. Inner-city medians ($2.5M+) are out of reach, so outer growth corridors with transport links win out.
- Melbourne, VIC: Outer southeast (e.g., Pakenham, Cranbourne) and northwest (e.g., Craigieburn) offer houses at $700,000-$900,000, while units in middle rings like Footscray ($500,000-$600,000) draw buyers. Regional Geelong ($700,000) also pulls in 20-25% of Victorian FHBs.
- Brisbane, QLD: Northern suburbs (e.g., North Lakes, $800,000-$900,000) and southern Logan ($700,000-$850,000) lead, with units ($500,000-$600,000) popular closer in. Coastal spots like the Gold and Sunshine Coasts snag 15-20% of state FHB activity.
- Perth, WA: Southeast (e.g., Armadale, $600,000-$800,000) and northern suburbs (e.g., Wanneroo, $700,000-$900,000) are hotspots, despite Perth’s median hitting $896,000 after a 22.6% surge in 2024.
- Adelaide, SA: Northern suburbs (e.g., Salisbury, $600,000-$800,000) and southern Onkaparinga dominate, with Adelaide’s $909,000 median still accessible compared to bigger capitals.
The Help to Buy Game-Changer
The Help to Buy scheme, expanded in the 2025 Federal Budget with an extra $800 million (totaling $6.3 billion through 2028-29), aims to assist 40,000 FHBs—10,000 per year—with a shared equity boost. The government covers 30% of an existing home’s price or 40% for a new one, requiring just a 2% deposit from buyers. Housing Minister Clare O’Neil claims “most first home buyers are now eligible,” thanks to raised income caps ($100,000 for singles, $160,000 for joint applicants) and property price caps aligned with state averages.
Here’s the kicker: this could turbocharge FHB purchasing power. Industry estimates suggest savings of $900-$1,200 per month on a $519,000 loan—equivalent to affording an extra $240,000 in debt. With a 2% deposit and 40% government equity (interest-free), buyers might borrow just 58% of the price. In FHB-heavy markets, this could inflate prices by 40% or more, especially where supply is tight.
Price Caps vs. Reality: A Table Tells the Story
How dramatically will Help to Buy reshape property markets? Let's crunch the numbers.
The scheme's expanded price caps already represent a significant shift—Sydney's $1.3 million threshold is 37% higher than the previous $950,000 limit. But there's an even more powerful dynamic at play that many analysts have missed.
Banks typically cap lending at a 6x debt-to-income ratio for traditional buyers. However, with the government funding up to 40% of the purchase price under Help to Buy, the equation fundamentally changes. With the government's support, FHB couples earning the maximum $160,000 joint income will effectively service properties worth up to $1.6 million—a staggering 10x income multiple that aligns with Australia's average price-to-income ratio.
This creates a new class of "super-powered" first home buyers with unprecedented market access. Here's how the numbers stack up across our capital cities:
The Ripple Effect
FHBs currently account for 25-30% of capital city purchases (CoreLogic), and with 10,000 Help to Buy spots annually, that’s 8-10% of their yearly 120,000 transactions. It’s the incremental buyers who often ignite price surges, and this scheme could amplify that. In Sydney, where units ($855,000) sit comfortably below the $1.3 million cap, FHBs on $160,000 joint incomes could manage a 10x debt-to-income ratio—pushing unit prices up fast. In Perth, where houses ($896,000) exceed the $800,000 cap but units ($475,000) don’t, outer suburbs could see a frenzy.
Critics on X argue Help to Buy “papers over affordability issues” and “pushes up prices”—basic economics of boosted demand meeting limited supply. If it becomes a fixture (picture the government essentially buying homes for people), public demand could make it a permanent price driver.
What It Means for FHBs—and Investors
For FHBs, Help to Buy is now a transformative opportunity, especially for couples with their effective purchasing power skyrocketing to $1.6 million (10x joint income), allowing them to target properties at or near median house prices. But competition will be fierce in the affordable segment of the market and around the Help to Buy caps, as buyers leverage their newfound financial firepower.
The Bottom Line
FHBs are already anchored in outer suburbs and smaller capitals—Sydney’s West, Melbourne’s North-West, Brisbane’s North, Perth’s South-East, and Adelaide’s North—plus regional gems like Geelong and the Central Coast. Help to Buy could supercharge these markets, driving prices up where FHBs cluster. While it’s a boon for eligible buyers, the trade-off might be steeper costs for everyone else. Watch this space—2025 could redefine Australia’s property landscape.
At Futurerent, we see opportunity. If you’re a landlord in these FHB strongholds, accelerating your rental income now could fund your next move before prices peak. Curious? Learn how we can help.
