First-home buyers are making a strong comeback, with new data from NAB revealing a 16% surge in lending to this cohort since February.
Overall, owner-occupier lending has jumped 32% over the same period, as falling interest rates and government support programs help more Australians take the leap into homeownership.
Charlotte Dru Ziegeler, a 33-year-old children's librarian from Geelong, is one of the many new homeowners who've recently entered the housing market.
Within just two weeks of receiving pre-approval from NAB, she'd found her dream home in nearby St Leonards and was preparing to move in.
"Back in February, I saw NAB had lowered their variable home loan rate, so I decided it was time to take another look at my options," Ziegeler said.
"I got pre-approved in less than an hour, and then not long after, the right house came up."
Her new home, located in a quiet coastal town close to where she grew up, offered familiarity and comfort.
"It all happened so fast. It was really exciting, and a huge 'pinch me' moment," Ziegeler said.
"I grew up around here, so that made the whole process a little less daunting, and I'm the first of my siblings to buy a home, so I've had a lot of support from my family."
According to NAB's latest data, Victoria has seen the strongest growth in first-home buyer activity, up 28% since February. Western Australia and Queensland followed closely, rising 22% and 21% respectively.
Denton Pugh, NAB executive for home lending, said cuts to both fixed and variable rates are contributing to a clear return of confidence in the housing market.
"We're seeing momentum return, especially with people like Charlotte who've been saving or waiting for the right time to take that jump into home ownership," Pugh said. "And that momentum could carry through winter, which is usually a quieter time with less sellers listing over the cooler months."
This renewed activity among first-home buyers is reflected in the latest REIA Housing Affordability Report, which showed first-home buyer activity softening in the short term but improving year-on-year.
New loan commitments fell 15.9% from the previous quarter to 26,091 but were up 1% annually. First-home buyers made up 35.7% of all owner-occupier loans. The average loan size dipped 0.1% to $542,356 but remained 4.6% higher than a year ago, underscoring the gradual recovery in buyer confidence amid ongoing affordability pressures.
Slower price growth benefits new buyers
While recent interest rate cuts have improved affordability, Pugh noted that borrowing costs remain high, which is keeping price growth subdued.
"Despite recent rate cuts, borrowing costs remain relatively high, limiting property value increases," he said. "Slower price increases benefit first-home buyers by reducing the pressure of rapidly rising house prices."
The Reserve Bank's second rate cut of 2025 lowered the cash rate to 3.85% – a two-year low – boosting borrowing power for home seekers.
Pugh added that multiple factors are helping buyers get into the market, but broader housing challenges persist.
"Lower rates are helping first-home buyers, as are initiatives such as the government's Home Guarantee Scheme, but housing affordability and supply aren't problems we can solve quickly."
"There's no silver bullet when it comes to housing – it will take business, government, and communities all working together."