The First Home Buyer Truth: What's Really Changed for Buyers

First-home buyer activity has slowed this year, and it's worth understanding why, because the answer isn't as simple as "prices are too high."

Equifax figures show first-home buyer mortgage demand fell 20.1% in the year to August, with Queensland among the states most affected, down more than 22%. That's a meaningful shift, especially with government assistance still available and parts of the market easing. It tells us buyers aren't disappearing, they're being more careful.

What's changed for buyers right now

Lenders have been adjusting fixed rates in recent weeks regardless of what the Reserve Bank does next, and the practical effect for buyers is simple: what you were approved to borrow six months ago may not be what you're approved for today. This year's rate movements alone have reduced borrowing capacity by roughly $35,800 for a single buyer and $71,600 for a couple, according to Canstar, even where income and savings haven't changed.

That's an important number to know before you start inspecting properties, not a reason to put your plans on hold.

Why the price tag isn't the whole story

Here's the encouraging part, and something we see firsthand every week: Cotality's data shows price weakness has been concentrated at the top end of the market, while the more affordable properties first-home buyers actually target have held up well. There are good opportunities out there. The buyers who do best are the ones who know their real numbers before they start, not after they've fallen for a property.

How to put yourself in the strongest position

• See a broker before you start inspecting. A quick check against today's rates means you're searching with a real budget from day one, saving you from disappointment further down the track.

• Ask about the 5% deposit scheme. It's still uncapped, has no income test, and skips lenders mortgage insurance entirely, a genuine head start for eligible buyers.

• Build in some buffer. Buyers who stretched to the limit last year have felt recent rate rises more than most. Leaving a little room makes your first home a lot more comfortable to live in.

What we're seeing at open homes in the Redlands

Buyers are asking sharper questions earlier, about body corporate fees, repayments and commuting costs, and that's a good sign. It means they're shopping with their eyes open. Some are adjusting their search to a different suburb or property type once they know their real numbers, and plenty are finding exactly the right fit as a result.

The bottom line for buyers

A 5% deposit gets you to the door. Knowing what you can genuinely borrow is what gets you through it, and gets you into a home you can comfortably keep. If you'd like a clear-eyed read on what your budget stretches to in today's market, and which suburbs and property types fit it best, get in touch. We're always happy to help you find the right path in.

General information only, not personal advice. Speak to a broker or financial adviser before making lending decisions.