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First home buyers have been taking the market by storm, with the number of FHB investor and owner-occupier loans tripling in 2024.
New data by Money.com.au revealed that first home buyer (FHB) loans outperformed other loans in 2024, growing 9.1 per cent compared to 3 per cent for other loans.
In total, 93.2 per cent of FHB loans were for owner-occupier properties compared to 6.8 per cent of FHB investor loans.
Nationwide, the average loan size for FHB increased by 1.6 per cent in the 2024 September quarter, asking for loans over $525,000, representing a 6.4 per cent annual increase.
Despite the increasing amount, FHB loans remained lower than the average annual loan size for non-first-home-buyers at $598,000.
Statewide, Victoria was the nation’s hotspot for FHBs, recording the highest growth rate at 14.6 per cent for FHB owner-occupier loans in 2024.
NSW followed this with a 10.9 per cent increase, and South Australia at 8 per cent.
In comparison, Queensland and Western Australia saw only a small increase in FHB loans, with a 4.5 per cent and 3.3 per cent growth rate, respectively.
Additionally, Money.com.au data showed that Victoria accounted for 36 per cent of all FHB owner-occupier loans, representing the largest share of FHBs among all states.
Money.com.au’s property expert, Mansour Soltani, said Victoria is gaining momentum and has become the FHBs’ state of choice.
“There’s a balance of affordability and opportunity in Victoria, which makes it an appealing destination for first-time buyers entering the property market,” Soltani said.
Soltani noted that Victoria’s affordable property market is a driving factor for FHBs, especially compared to Sydney’s prices.
Compared to Victoria, Soltani said NSW is a “tough market” for first home buyers due to high property prices.
Despite recording the second-highest annual growth in FHB loans, NSW’s loan size was the highest in the country at $621,000.
This is 34 per cent higher than Western Australia’s, which recorded the smallest average annual FHB loan size at $462,000.
Victoria’s average annual FHB loan size in 2024 was $513,485, up from $500,313 a year ago.
To counteract high prices, first home buyers in NSW have turned to “rentvesting” to enter the property ladder.
Data showed that in NSW, nearly one in 10 FHB loans are for investment purposes.
Additionally, investor loans in NSW grew to 31.3 per cent in 2024, the fastest rate nationwide.
Soltani said while the rentvesting trend for first home buyers is more prominent in NSW, it appeals to FHBs across the country.
In total, FHB investor loans grew at twice the pace of FHB owner-occupier loans annually, rising 21.4 per cent compared to a 9.1 per cent.
“First home buyers are increasingly entering the property market as investors while continuing to rent in suburbs where they prefer to live.
“It’s a strategic approach to balancing affordability and lifestyle, as they may be able to borrow more as investors by factoring in potential rental income,” Soltani said.
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