The suburbs first-home buyers are flocking to

Caroline Riches, Property Journalist

First published 30 November 2023, 10:22 PM

Last updated 12 December 2023, 11:16 AM

And they're buying in very specific places according to the data, primarily in the outer suburbs of capital cities or regional towns.

According to PropTrack, housing affordability is at its worst level in at least three decades, presenting a tough quandary for first-home buyers: escalating property prices necessitating larger deposits coupled with high interest rates that limit borrowing capacity and increase repayments.

PropTrack senior economist Angus Moore said there's been a significant drop in total first-home buyer numbers across the country compared to previous years.

"In 2021, around 160,000 first-home buyers were successful, but we saw about 30% fewer in 2022 as interest rates rose, and it's looking to be about 10% to 15% fewer again this year, which is more in line with pre-pandemic figures," Mr Moore said.

"First-home buyers are particularly constrained by financing conditions and the data shows us that they're mostly buying in these outer suburban, more affordable areas."

Affordable regional towns like Tamworth in New South Wales Australia have been popular with buyers using the Home Guarantee Scheme. Picture: Getty

This deterioration in housing affordability has seen a higher proportion use the government's Home Guarantees Scheme to get onto the property ladder - up from one in seven during the 2012-2022 financial year, or around 23,300 guarantees in total - to nearly one in three in 2022-2023 with around 41,700 Australians using the scheme to buy a home.

The scheme - which includes the First Home Guarantee, Family Home Guarantee and Regional First Home Buyer Guarantee - allows eligible buyers to purchase a home with a small deposit, such as 5%, without needing to take out lenders mortgage insurance (LMI).

While the Family Home Guarantee is not exclusive to first-home buyers, eligible single parents must not currently own property to participate.

To qualify for the scheme, individuals can earn up to $125,000 and couples up to $200,000, with varying property price caps based on location.

But even with the deposit barrier lowered, Sydney buyers agent Michelle May estimates at least 70% of her first-home buyer clients are tapping into the bank-of-mum-and-dad to help with the deposit, agent fees or mortgage repayments.

What they're buying

Recent data from Housing Australia - formerly the National Housing Finance and Investment Corporation - shows first-home buyers supported by the Home Guarantee Scheme prefer larger, family-sized homes, with 68% of purchases having three or more bedrooms.

"Houses are very common among first-home buyers, which is just the fact that houses are most of the housing stock in Australia," Mr Moore said.

"But first-home buyers are more likely to purchase apartments than other purchaser types, which makes sense."

While family homes were the most popular, many first-home buyers purchased units in the capital cities. Picture: Getty

Single buyers, however, opted for smaller properties, with 90% of one-bedroom properties and 75% of two-bedroom homes purchased by singles.

Ms May said her first-home buyer clients were more likely to compromise on space than location.

"First-home buyers are not giving up. They're just compromising," she said.

"The demand for three-bedroom apartments is out of this world. The kids may have to share a bedroom so they can use the third bedroom as an office."

Where they're buying

The strongest uptake was in regional Queensland as well as the outer suburbs of Brisbane, Perth, Sydney and Melbourne, according to Housing Australia's fourth annual Home Guarantee Scheme Trends and Insights Report for the 2022/2023 financial year.

New South Wales

In NSW, most users flocked to Sydney's southwest. The 2170 postcode, which captures Liverpool, attracted 166 buyers through the scheme, while the postcode 2560, capturing Campbelltown drew 142.

Homes in Sydney's south west and far west were popular with buyers using the guarantee scheme in 2022-23. Picture: realestate.com.au

The average purchase price for those using the scheme in Greater Sydney was $652,510, compared to a median Sydney property value of $1,070,000, according to PropTrack's Home Price Index.

"Sydney’s house and unit prices are growing further out of reach for most first-home buyers," Ms May said.

"Even with a healthy budget of $900,000 – the price cap for buyers taking advantage of the scheme in Sydney – they're priced out of most suburbs. So we're seeing them go further and further out, many to suburbs 40km away from the CBD."

Top NSW postcodes with buyers using the Home Guarantee Scheme

	Postcode	Suburbs	Guarantees
1	2170	Liverpool, Casula, Warwick Farm	166
2	2560	Campbelltown, Appin, Rosemeadow	142
3	2340	Tamworth	117
4	2650	Wagga Wagga	106
5	2148	Blacktown, Kings Park, Prospect	105
6	2750	Penrith, Jamisontown, Emu Plains	104
7	2250	Gosford	100
8	2155	Rouse Hill, Kellyville, Beaumont Hills	96
9	2747	Kingswood, Jordan Springs, Werrington	94
10	2320	Maitland, Pokolbin, Rutherford	88
Source: Housing Australia, 2022-23 guarantees. Postcodes can contain multiple suburbs, not all suburbs included from each postcode.

Uptake of the scheme was also strong in the regional town of Tamworth, which recorded 117 purchases through the scheme in the 2022-23 financial year.

Local agent Mark Sleiman at PRD Tamworth said the town has always attracted plenty of first-home buyers.

"It's affordable; you can get a home here for $500,000. That's a much more achievable outcome in today's high interest rate market than what you'd find in, say, western Sydney."

Victoria

In Melbourne, where the median property price is $815,000, buyers paid an average of $537,870.

The highest number of purchases (185) were in postcode 3064 around Craigieburn in the city's outer north, while 177 bought in 3029 around Hoppers Crossing in the southwest. Outer Melbourne suburbs filled out the top 10 while 71 users bought in Ballarat.

Top Vic postcodes with buyers using the Home Guarantee Scheme

	Postcode	Suburbs	Guarantees
1	3064	Craigieburn, Donnybrook, Mickleham	185
2	3029	Hoppers Crossing, Tarneit, Truganina	177
3	3977	Cranbourne, Botanic Ridge, Sandhurst	170
4	3810	Pakenham	137
5	3978	Clyde	135
6	3030	Werribee, Point Cook	124
7	3338	Melton South, Brookfield, Weir Views	90
8	3429	Sunbury	79
9	3337	Melton, Harkness, Kurunjang	74
10	3350	Ballarat	71
Source: Housing Australia, 2022-23 guarantees. Postcodes can contain multiple suburbs, not all suburbs included from each postcode.

Agent Romi Sleiman at Barry Plant Craigieburn said 80% of buyers in his area were buying their first home, attracted by its affordability. Most snapped up townhouses and single-storey homes.

"They're getting their foot in the market, then they sell up in a few years after they've made a bit of money, and move closer into the city again."

Queensland

The Coral Coast town of Mackay saw 286 purchases, more than anywhere else in the country, with postcode 4207 around Beenleigh southeast of Brisbane attracting 216, postcode 4350 around Toowoomba pulling 202 and postcode 4305 around Ipswich, 182.

While the median property value in Queensland is $622,000, those using the scheme paid an average of $400,245.

Top QLD postcodes with buyers using the Home Guarantee Scheme

	Postcode	Suburbs	Guarantees
1	4740	Mackay	286
2	4207	Beenleigh, Logan Village, Eagleby	216
3	4350	Toowoomba	202
4	4305	Ipswich, Leichhardt	182
5	4680	Gladstone	174
6	4818	Burdell, Deeragun, Bushland Beach	154
7	4701	Rockhampton	147
8	4510	Caboolture	146
9	4300	Springfield, Brookwater	139
10	4670	Bundaberg	136
Source: Housing Australia, 2022-23 guarantees. Not all suburbs included from each postcode.

Agent Robyn Faa at Mackay Regional Real Estate said Mackay had seen consistently high levels of first-home buyers over the last 12 months.

"Our first-home buyers are mainly local and they're predominantly chasing houses over apartments. Anything selling under $500,000 is particularly popular."

South Australia

In South Australia, six of the top 10 postcodes for users were in Adelaide's far northeast or southwest. While the city's median property value is $697,000, those using the scheme paid an average in Greater Adelaide of $434,801.

Top SA postcodes with buyers using the Home Guarantee Scheme

	Postcode	Suburbs	Guarantees
1	5114	Smithfield	55
2	5162	Morphett Vale	47
3	5251	Mount Barker	41
4	5108	Salisbury	39
5	5169	Seaford	39
6	5115	Munno Para	36
7	5290	Mount Gambier	35
8	5540	Port Pirie	31
9	5608	Whyalla	26
10	5113	Davoren Park	25
Source: Housing Australia, 2022-23 guarantees. Not all suburbs included from each postcode.

Western Australia

WA recorded some of the highest numbers of purchases in the country, with the outer suburbs of Perth especially popular.

Suburbs in the postcode of 6112 were most popular with buyer's using the Home Guarantee Scheme in WA. Picture: realestate.com.au

In the city's south, postcode 6112 around Armadale, postcode 6171 around Baldivis, and 6164 around Jandakot attracted 219, 181 and 178 buyers respectively.

Home Guarantee Scheme users in Greater Perth paid an average price of $377,006, compared to the city's median property value of $604,000.

Top WA postcodes with buyers using the Home Guarantee Scheme

	Postcode	Suburbs	Guarantees
1	6112	Armadale	219
2	6171	Baldivis	181
3	6164	Jandakot	178
4	6055	Guildford	156
5	6069	Ellenbrook	152
6	6061	Balga	135
7	6210	Mandurah	127
8	6056	Midland	110
9	6110	Gosnells	103
10	6122	Byford	103
Source: Housing Australia, 2022-23 guarantees. Not all suburbs included from each postcode.

Aman Singh at The Best Realty Group said the area around Armadale had seen "a massive influx of first-home buyers".

"A good number are moving interstate from Sydney and Melbourne because their budget can go so much further," he said.

"They're buying three-bedroom homes with land, and they don't care if it's renovated or not. With such a lack of stock, they just want a roof over their head and they might renovate down the line."

Tasmania

In Tasmania, the northern cities of Devonport and Burnie both welcomed 35 buyers, more than anywhere else in Tasmania.

Top Tas postcodes with buyers using the Home Guarantee Scheme

	Postcode	Suburbs	Guarantees
1	7310	Devonport	35
2	7320	Burnie	35
3	7011	Claremont	28
4	7250	Launceston	26
5	7030	Bridgewater	21
6	7010	Glenorchy	17
7	7248	Invermay	16
8	7140	New Norfolk	15
9	7315	Ulverstone	14
10	7016	Risdon Vale	13
Source: Housing Australia, 2022-23 guarantees. Not all suburbs included from each postcode.

Buyers using the guarantee scheme on the island paid an average of $371,572, well below Tasmania's median property value of $498,000.

Northern Territory

The median property value in the NT is $429,000, while buyers paid an average of $393,843.

The highest number of them (80) purchased in postcode 0832 around the Palmerston suburb of Zuccoli, southeast of Darwin, while closer to the capital, postcode 0810 around Nightcliff and Coconut Grove attracted 37 buyers.

Top NT postcodes with buyers using the Home Guarantee Scheme

	Postcode	Suburb example	Guarantees
1	0832	Zuccoli	80
2	0810	Nightcliff, Coconut Grove	37
3	0820	Winnellie	27
4	0830	Palmerston City, Durack	24
5	0870	Alice Springs	24
6	0812	Leanyer	16
7	0800	Darwin	13
8	0850	Katherine	13
9	0828	Berrimah	6
10	0875	Larapinta	5
Source: Housing Australia, 2022-23 guarantees. Not all suburbs included from each postcode.

Australian Capital Territory

In the ACT, where the median property value is $848,000, buyers using the scheme forked out an average of $558,559.

The most popular suburbs were west of Canberra's CBD: postcode 2611 around Weston Creek attracted 67, while postcode 2617 around Belconnen, 63.

Top ACT postcodes with buyers using the Home Guarantee Scheme

	Postcode	Suburb example	Guarantees
1	2611	Weston Creek	67
2	2617	Belconnen, Bruce	63
3	2615	Holt	58
4	2913	Ngunnawal	49
5	2602	Dickson	48
6	2905	Chisholm	39
7	2612	Braddon	38
8	2900	Tuggeranong	28
9	2912	Gungahlin	28
10	2906	Gordon, Banks	27
Source: Housing Australia, 2022-23 guarantees. Not all suburbs included from each postcode.