First home buyer (FHB) loan commitments in Australia remain at historically elevated levels in early 2026, supported by the First Home Guarantee scheme, state-based grants and concessions, declining interest rates, and income growth that has outpaced property price increases in several markets. According to ABS data, FHBs represented approximately 28% of all owner-occupier loan commitments by number in December 2025 — up from a trough of 22% in mid-2022 when interest rates peaked.
First Home Buyer Loan Activity — The Key Data Points
The ABS reports that 10,247 first home buyer loan commitments were made in December 2025 — a 7.4% increase on the same month the prior year. The average FHB loan size in December 2025 was $520,000 nationally, ranging from $428,000 in regional areas to $619,000 in capital cities (Sydney: $727,000; Melbourne: $576,000; Brisbane: $530,000; Perth: $485,000; Adelaide: $465,000).
The median age of first home buyers in Australia is approximately 33 years — younger in Perth and Adelaide (31 and 31 respectively), older in Sydney (35). The proportion of FHBs purchasing houses (vs apartments) has increased to approximately 58% nationally, reflecting preferences for space and the FHOG's bias toward new homes in most states.
FHB Activity By State
QLD and WA accounted for a disproportionate share of FHB activity in early 2026, driven by relative affordability (particularly Perth), the QLD $30,000 FHOG (available until June 2026), strong employment markets and interstate migration. NSW FHB activity is recovering as rate reductions improve borrowing capacity, though affordability remains the primary constraint.
Government Scheme Take-Up and Availability in 2026
The First Home Guarantee (FHG) continued to be heavily subscribed in FY2025-26. Housing Australia data suggests places are being taken up at a rate that implies the full 35,000 annual allocation will again be exhausted before financial year end. The Family Home Guarantee (5,000 places) and Regional First Home Buyer Guarantee (10,000 places) are also tracking toward full utilisation.
Broker data suggests approximately 45–50% of eligible first home buyer loans processed through brokers in 2025-26 utilised the FHG. The scheme has been most impactful in QLD, WA and SA — where lower median prices mean more properties fall within the price caps — and less so in Sydney, where the $900,000 cap excludes a large portion of the market.
Key Challenges and Opportunities for First Home Buyers in 2026
The primary challenge for first home buyers in 2026 remains affordability — particularly in Sydney and Melbourne, where saving a deposit requires many years on average income. However, several factors are improving the FHB position: interest rates have fallen by 0.5% from the peak, improving borrowing capacity; income growth in 2024–25 has been stronger than property price growth in most markets; and government scheme infrastructure is more comprehensive than at any prior point.
The key opportunity for FHBs in 2026 is in markets where price caps align well with the available stock — Perth (most new home stock well within the $600K cap), QLD (strong FHOG of $30K still available), and Adelaide. FHBs in these markets can potentially access both the FHG (no LMI) and the FHOG ($15,000–$30,000 cash) simultaneously on a new home purchase.
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About the Author
Sakib Manzoor
Senior Finance Wellness Expert
Sakib Manzoor is the founder of Secure Finance and brings extensive experience in Australian mortgage broking and financial wellness. Specialising in helping clients achieve their property finance goals through personalised strategies and expert guidance, Sakib is FBAA accredited and committed to providing clear, actionable advice. All content is written to meet Australian regulatory standards and is regularly updated to reflect current market conditions.