If FHBs can navigate the risks, this is one of the best ways they can buy

As aspiring homebuyers navigate today’s challenging market, this property type might offer the potential they need to realise their homeownership dreams. First-home buyers have historically faced numerous hurdles in their pursuit of homeownership. Saving up for a hefty deposit, usually around 20%, is a major hurdle.

While schemes and grants exist to lower that deposit to 5%, this might not be a viable option for everyone. In the December quarter of 2024, there were 83,206 new home loans approved, a 2.2% rise compared to the previous quarter, according to Australian Bureau of Statistics data.



A substantial 29,788 of those were for first-home buyers. And while governments are consistently rolling out new programs to help first-home buyers get a foot on the property ladder, new loan commitments to that cohort have only risen 0.2% over the past 12 months.

At the same time, the value of new loans has grown staggeringly. “In original terms, the value of new home loans during the 2024 calendar year reached $205.7 billion.

This was 13.6 per cent higher than the $181.0 billion value of new loans in 2023,” ABS head of finance statistics Dr Mish Tan said.

In the December 2024 quarter, 29,788 approved home loans were for first-home buyers. Picture: GettyPRD Real Estate chief economist Dr Diaswati Mardiasmo said it’s clear that first-home buyers are having to come up with increasingly more cash to make their first purchase. “At the moment first-home buyer loans have pretty much increased all across the country,” Ms Mardiasmo said.

“Australia-wide, the average loan for first-home buyers have gone up by about 5 to 6% which means it’s going to be even harder to get that 20% deposit.” In addition to this, the competition in the property market can price out many first-home buyers. Investors and owner-occupiers with more financial leverage enter the market confidently, usually outbidding first-home buyers.

“You’ve got that competition, the deposit and also the fact that, unfortunately, there’s no special considerations for first-home buyers,” Ms Mardiasmo said. “The bank isn’t going to give you a lower interest rate because you’re a first-home buyer and the property market doesn’t wait for you because you’re a first-home buyer.”But are there ways that first-home buyers can take advantage of programs and market factors to make getting onto the property ladder easier? Government incentives like the First Home Guarantee and Help-to-Buy Scheme aim to help, and with the federal election coming soon, there’s an increased focus by political parties to get these buyers into their first homes.

Apart from government support, first-home buyers can look to areas in the market that might offer a way in as long as they make savvy choices. Buying off-the-plan is an area that deters some buyers due to the long wait times and element of uncertainty associated with laying down money for something that doesn’t yet exist.But if first-home buyers can navigate these complexities, they might be perfectly primed to take advantage of the plus-sides of buying this property type – particularly because these homes appeal to them.

REA Group’s 2024 Property Seeker Report shows growing interest in new homes amongst first-home buyers, and with new apartments driving record building approvals, now might be the time to consider them. The biggest off-the-plan benefits for first-home buyersOff-the-plan apartments could offer several benefits to first-home buyers.Off-the-plan homes can offer benefits such as longer settlement periods, sunset clauses and savings.

Picture: GettyThey often provide longer settlement periods, even up to two years in some cases, giving buyers more time to save. This is more flexible than the 30 to 90 days settlement period usually seen with established homes. Another potential benefit is sunset clauses, which is a statement in the contract of sale that effectively puts a time limit on the contract’s validity.

These can protect buyers if settlement hasn’t taken place by the date included in the clause, giving the buyer their deposit back. These could soon become mandatory in NSW. Savings on the tablePart of the benefit of buying off the plan is the potential for saving on the purchase by getting in early.

First-home buyers with time on their side should look to take advantage of the pre-sales period, when off-the-plan apartments are priced at their most affordable. It means they have longer to wait, but that period can be used to save further for the deposit.Other benefits include the incentives offered by builders and developers as well as locations, which is often within city centres, providing a convenient lifestyle with reduced commuting costs and time.

“In Sydney and Melbourne, because demand is a bit low from first-home buyers, there’s quite a lot of builders and developers who are offering discounts for cashbacks and incentives, which obviously you don’t find if you’re buying an established house,” Ms Mardiasmo said. “A lot of these developments are in the CBD and you might be able to save a little bit on transport, you’ve got all kinds of facilities and you might be able to save a bit more time as opposed to having to buy a house that is established that is half an hour or 45 minutes away from where you work.” Governments are also providing incentives specifically targeted towards off-the-plan homes.

In October 2024, the Victorian government slashed stamp duty for off-the-plan developments for a 12-month period. Recently, Queensland extended similar benefits to all new builds, including off-the-plan properties, specifically for first-home buyers. Thorough research is key when considering off-the-plan properties.

Picture: GettyOff-the-plan buying risks that hold FHBs back Yet, challenges remain. Ms Mardiasmo said these come down to uncertainty. “There’s still a possibility that it might not go ahead, which can happen for any off-the-plan [development], whether it’s because of a change in the permit or regulation or you don’t get financed,” she said.

Part of that uncertainty can be fuelled by construction delays, further delaying buyers from moving into their first home. When looking into off-the-plan apartments, Ms Mardiasmo said thorough research is key, especially when looking to the developer or builder. “Look into whether the company has their own contractors, builders or bricklayers, because the one thing that many people don’t realise is the company itself might have a good name, but the subcontractors they use may not be so reliable and that can cause delays and an increase in costs,” she said.

It’s also important to consider what you want and need as a buyer. Understanding additional amenities, being aware of pricing structures and anticipating future developments like infrastructure in chosen suburbs are essential steps in due diligence. Ms Mardiasmo also advised to engage with a lawyer.

“Yes, it might cost you a little bit more but it’s going to cost you even more if something happens with your contract and you lose your whole deposit,” she said. “Engaging in a lawyer or a legal person to just have a look at the contracts is a must for anyone who’s thinking of buying off the plan.” Are you interested in off-the-plan apartments? Check out our New Homes section.

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