Unlock the Secrets to First Home Buyer Statistics

First home buyer participation has shifted considerably since late 2025 when federal deposit schemes removed annual place limits and state governments adjusted stamp duty thresholds. Understanding these statistics helps buyers in Surrey Hills determine how their circumstances compare to broader market activity and whether current schemes align with their deposit position and purchase timeline.

How Many First Home Buyers Are Active in the Market

First home buyers made up approximately 25% to 28% of all residential purchases across Victoria in the first half of 2026. This proportion increased from around 18% to 20% in the same period two years earlier. The rise correlates directly with the expansion of the Australian Government 5% Deposit Scheme from 1 October 2025, when income caps were removed and property price caps were lifted to $950,000 in Melbourne.

In Surrey Hills, where the median house price sits above $2 million, first home buyers typically target units and townhouses rather than detached houses. Unit sales to first home buyers represented roughly 40% of apartment transactions in the suburb during early 2026, a higher concentration than the metropolitan average. These buyers often combine a smaller deposit under the federal scheme with Victoria's stamp duty concession, which provides full exemption on properties up to $600,000 and sliding relief to $750,000.

Consider a buyer purchasing a two-bedroom unit near Union Road at the median unit price for Surrey Hills. With a 5% deposit under the federal scheme, no lenders mortgage insurance applies because Housing Australia guarantees the shortfall to 20%. If the purchase price falls within the stamp duty concession range, the buyer avoids transfer duty entirely or pays a reduced amount, depending on the exact price. This combination of schemes reduces the upfront capital required by tens of thousands of dollars compared to conventional lending without government support.

First Home Buyer Age and Income Profiles

The median age of first home buyers across Australia sits between 32 and 34 years. In higher-value markets such as Surrey Hills, the median age trends slightly older, often between 34 and 36, reflecting the time required to accumulate a deposit in line with local property values. Single buyers represent approximately 35% of first home purchasers, with couples making up the majority of the remaining transactions.

Income levels among first home buyers vary widely depending on household composition and location. In Melbourne's inner and middle ring suburbs, combined household incomes for first home buyers purchasing units typically range from $120,000 to $180,000. Single buyers in the same areas often earn between $80,000 and $110,000. These income levels align with borrowing capacity sufficient to service a loan on a property priced between $600,000 and $900,000, depending on existing debts and living expenses.

The removal of income caps under the Australian Government 5% Deposit Scheme from 1 October 2025 broadened access for buyers with higher incomes who had previously been excluded from similar programs. This change particularly benefited buyers in suburbs such as Surrey Hills, where property prices often exceeded the borrowing capacity of buyers within the previous income limits but who still lacked a 20% deposit.

Deposit Sources and Savings Timeframes

Most first home buyers accumulate their deposit through a combination of salary savings, the First Home Super Saver Scheme, and in some cases a gift from family. The FHSS allows buyers to contribute up to $15,000 per financial year into superannuation, with a total release cap of $50,000. Contributions are taxed at 15% rather than marginal rates, providing a tax-effective way to build a deposit over two to four years.

In our experience, buyers who use the FHSS typically apply for a determination from the Australian Taxation Office four to six weeks before signing a contract. Funds are then released to the buyer's nominated account within two to three weeks of the ATO approving the release. Timing this process around a purchase requires coordination, particularly in a competitive market where contract timelines may be short.

Gift deposits are also common, particularly among buyers in higher-value suburbs. Lenders generally require a statutory declaration from the donor confirming the funds are a genuine gift with no obligation to repay. Some lenders also request evidence of the donor's capacity to make the gift, such as bank statements showing the funds before transfer. Where a gift forms part of the deposit, lenders typically require the buyer to demonstrate genuine savings equivalent to at least 5% of the purchase price, depending on the loan structure and lender policy.

Regional Differences in First Home Buyer Participation

First home buyer participation rates differ considerably between metropolitan Melbourne and regional Victoria. In regional centres, first home buyers often represent 30% to 35% of all transactions, a higher share than in the city. Lower median prices in regional areas reduce the absolute deposit required, even where percentage deposit requirements remain consistent.

Property price caps under the Australian Government 5% Deposit Scheme also influence regional participation. The $950,000 cap in Melbourne applies citywide, meaning buyers in Surrey Hills face the same cap as those in outer suburbs despite significant price differences. This structure limits the scheme's relevance for buyers targeting houses in Surrey Hills but remains applicable for buyers purchasing units or considering nearby suburbs with lower median prices.

Regional Victoria benefits from higher property price caps in some cases under the Help to Buy scheme, though Victoria's caps are set at $950,000 for Melbourne and $775,000 for regional areas. Help to Buy allows the government to take an equity stake of up to 30% on an existing home or 40% on a new home in exchange for a proportional share of future capital growth or loss. Buyers must meet income limits of $100,000 for individuals or $160,000 for couples, and a minimum 2% deposit is required. This scheme cannot be combined with the 5% Deposit Scheme but can be used alongside Victoria's stamp duty concessions.

How Scheme Changes Have Affected Purchase Patterns

Since the expansion of the 5% Deposit Scheme in late 2025, the proportion of first home buyers purchasing with deposits between 5% and 10% increased from approximately 15% of all first home purchases to around 35%. The removal of annual place limits removed the uncertainty that previously required buyers to apply early in the financial year to secure a spot before allocations were exhausted.

Victoria's adjustment to stamp duty concessions also influenced purchase behaviour. The full exemption threshold of $600,000 and the sliding concession to $750,000 mean that buyers targeting properties in that range capture the full benefit of the concession. For buyers in Surrey Hills purchasing a unit near the upper end of that range, the duty saved can exceed $30,000, a sum that might otherwise have extended the deposit timeline by one to two years.

Another pattern observed since mid-2025 involves buyers splitting their borrowing between fixed and variable rates. This approach, often referred to as a split loan strategy, allows buyers to lock in a portion of their debt while retaining an offset account against the variable portion. Interest rate movements during 2025 and early 2026 prompted many buyers to fix between 30% and 50% of their loan, though individual circumstances vary. Buyers considering this structure should assess their tolerance for rate movements and their ability to make extra repayments, as fixed rate products typically carry restrictions on additional payments and early exit.

Lenders Mortgage Insurance and Low Deposit Lending

Lenders mortgage insurance is typically required when a borrower's deposit is less than 20% of the property value. LMI protects the lender in the event of default and is paid by the borrower as a one-off premium, either upfront or capitalised into the loan. The cost of LMI varies depending on the loan-to-value ratio and the loan amount, but for a purchase with a 10% deposit, LMI premiums often range from $10,000 to $20,000 on a property priced between $700,000 and $900,000.

Under the Australian Government 5% Deposit Scheme, LMI is not payable because Housing Australia guarantees the difference between the buyer's deposit and 20% of the property value. This removes a significant cost barrier for eligible buyers. Applications are made through participating lenders, and buyers should confirm their chosen lender is part of the panel before proceeding with a home loan application.

For buyers who do not qualify for the 5% Deposit Scheme or who are purchasing a property above the $950,000 cap, conventional low deposit lending with LMI remains an option. Some lenders offer products with deposits as low as 5% outside the government scheme, though LMI costs are generally higher than for loans with 10% or 15% deposits. Comparing the total cost of LMI against the time required to save a larger deposit is a key decision point for many buyers.

Call one of our team or book an appointment at a time that works for you to discuss how current first home buyer schemes apply to your circumstances and which loan options align with your deposit position and purchase timeline in Surrey Hills.

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