Australia’s first-home buyers are showing renewed interest in mortgages even as investors and other owner-occupiers remain cautious. For Indian Australians hoping to buy, the shift may create more room to negotiate—but a smaller deposit does not make an expensive loan automatically affordable.
What the latest lending data shows
New Loan Market data reported by Guardian Australia shows first-home buyer applications fell 3 per cent in July, then rose 10 per cent on a weekly average basis in the first half of August compared with July. Applications from investors and other owner-occupiers were broadly steady in August compared with June.
The private broker data captures applications through one network, so it should not be read as the whole market. The broader Australian Bureau of Statistics picture was still softer in the June quarter: total home-loan demand fell 5.4 per cent, investor loan numbers dropped 8.6 per cent and first-home buyer mortgages declined 2.9 per cent on a seasonally adjusted basis.
There were important state differences. First-home purchases remained above their level a year earlier in New South Wales and the ACT, while South Australia and Tasmania reached their highest levels since 2021.
Together, the figures suggest first-home buyers have not escaped higher borrowing costs, but are proving more resilient than investors.
Why first-home buyers are staying active
Three factors are helping some buyers remain in the market.
The 5% Deposit Scheme has expanded
The Australian Government 5% Deposit Scheme allows eligible first-home buyers to purchase with a minimum 5 per cent deposit. Eligible single parents may be able to buy with a 2 per cent deposit. The government guarantee means borrowers can avoid lenders mortgage insurance, although normal lender serviceability checks still apply.
Housing Australia says the expanded scheme has no income caps, unlimited places and no waiting list. It can cover a house, townhouse or unit, whether existing or newly built, subject to eligibility and location-based price limits.
According to figures cited by Guardian Australia, more than 320,000 people have used the scheme since 2020. Participants typically saved more than $15,000 in lenders mortgage insurance on the median purchase, while more than 5,000 guarantees were issued in most months from February 2026.
Property price limits are shaping demand
Buyers using the scheme must stay under the applicable property price cap. Current caps cited in the report include $1.5 million in NSW capital-city and regional-centre markets, $1 million in south-east Queensland, $950,000 in Melbourne and Geelong, $900,000 in Adelaide, $850,000 in Perth and $700,000 in Hobart.
These are maximum eligible prices, not recommended budgets. A household should set its own ceiling from verified income, expenses, dependants, debts and an interest-rate buffer—not from the amount a lender is willing to approve.
Some investors are stepping back
Higher interest rates and changed tax settings have reduced investor activity. That does not guarantee cheaper homes, but it can mean fewer investor bidders for some properties. Competition may remain intense around homes just below scheme price caps, where first-home buyer demand is concentrated.
A practical checklist for Indian-Australian households
Buying a first home can involve family expectations, overseas transfers or temporary visa history. Before making an offer:
- Confirm eligibility first. Check the current Housing Australia rules and speak with a participating lender; visa, residency and previous property ownership can affect eligibility.
- Stress-test repayments. Model the loan at a rate at least 1–2 percentage points above the quoted rate and include council rates, strata fees, insurance, maintenance and utilities.
- Document overseas funds. If deposit money or a family gift comes from India, keep bank statements, remittance records and a signed gift declaration. The lender may need evidence of the source of funds.
- Check transfer timing. International transfers can be delayed by bank compliance reviews. Do not assume money sent near settlement will arrive immediately.
- Get independent legal advice. Use a solicitor or conveyancer to review the contract, title, easements, strata records and cooling-off conditions before committing.
- Arrange inspections. A building and pest inspection can reveal defects that are not obvious at an open home.
- Compare lenders. Not every lender participates in government schemes, and rates, fees and borrowing assessments differ.
- Avoid draining every dollar. Keep an emergency buffer after the deposit, stamp duty or concessions, legal costs and moving expenses.
Other support worth comparing
The First Home Super Saver Scheme may let eligible buyers build a deposit through voluntary super contributions and withdraw up to $50,000 plus associated earnings. Couples may each be able to use their own eligible savings, subject to Australian Taxation Office rules.
The federal Help to Buy shared-equity scheme is another pathway for eligible households, with a minimum 2 per cent deposit and a government contribution of up to 30 per cent for an existing home or 40 per cent for a new home. Shared equity has different eligibility, income and repayment implications, so compare the long-term cost and conditions carefully.
The takeaway
The August rebound is an encouraging signal, not a reason to rush. Indian Australians considering a first home should use the reduced investor activity to research, negotiate and compare support—not to stretch beyond a safe repayment level. Start with official Housing Australia and ATO guidance, obtain independent financial and legal advice, and make any offer subject to appropriate checks.
Sources: Guardian Australia lending report; Housing Australia first-home buyer support; ATO First Home Super Saver Scheme