First home buyers are entering the market with smaller deposits and new strategies

Saving for a home has never been easy, and in Sydney, the finish line keeps moving as property prices continue to climb. As a result, first home buyers are increasingly turning to smaller deposits, government support schemes and creative purchasing strategies to get a foothold in the market sooner. 

The deposit gap is growing

In Sydney, where the median house price remains well above the national average, saving a 20% deposit can take more than seven years for a typical household, according to Domain. 

At the same time, according to data from the Commonwealth Bank (CBA), the average first home buyer deposit fell to around 16%, reflecting a deliberate trade-off: rather than waiting years to build a larger deposit, more buyers are choosing to enter the market sooner with what they have, often using lender’s mortgage insurance (LMI) or government guarantees to bridge the gap. 

Government schemes are helping

Government support is playing a bigger role in helping buyers bridge the deposit gap. The Australian Government 5% Deposit Scheme allows eligible buyers to purchase with as little as 5% down without paying lenders mortgage insurance, because the federal government guarantees part of the loan. According to CBA, nearly 50,000 customers have used this scheme since July 2022.

State-based schemes, stamp duty concessions and the First Home Super Saver Scheme (FHSSS) are also being used in combination to reduce the upfront cost burden. For many buyers, stacking these incentives is the difference between buying this year and buying in five years.

Buyers are rethinking what home looks like

Another clear shift is that many first home buyers are broadening their idea of what that first purchase should look like. Buyers are increasingly considering units and apartments in well-connected suburbs. In Sydney, in February 2022, the average house listing on realestate.com.au received 26 more enquiries in than a comparable unit listing. By February 2026, that gap had shrunk to just 10. Nationally, unit enquiries per listing surged nearly 20% since early 2022, while house enquiries fell 16%.

Beyond units, buyers are also looking at regional and outer suburban areas, co-buying with friends or family, and "rentvesting" (purchasing an investment property in an affordable area while continuing to rent closer to work).

Your first home might be closer than you think

In a market like Sydney, where affordability remains a major barrier, flexibility around property type, location and long-term strategy is becoming one of the most important ways first home buyers can get started. While these strategies involve compromises, they can be highly effective when approached with the right financial structure. 

At Eventus Financial, we help Sydney first home buyers navigate government schemes, structure loans around smaller deposits and find lenders suited to their situation.

If saving a deposit feels like a moving target, expert lending advice can make all the difference. Eventus Financial is an award-winning Sydney mortgage broker with over 400 five-star Google reviews. Schedule a no-obligation consultation with Alex to see what’s possible.