First home buyer schemes reshape entry-level competition
First home buyer schemes are opening more pathways into the market, but they are also changing how buyers navigate lending and competition.
With serviceability buffers requiring borrowers to prove they can manage rates around 9% or higher, borrowing capacity is becoming the key constraint. This is pushing many first home buyers toward more affordable price points rather than their preferred locations.
Investor demand is also concentrated in this segment, accounting for around 40% of mortgage demand and adding to competition for entry-level stock.
Cotality data shows this shift is already influencing outcomes, with properties under the 5% deposit scheme caps recording stronger value growth than higher-priced homes. In Sydney, lower-priced properties rose 4.1% over six months while higher-priced homes declined 1.1%.
This means first home buyers are now relying more on strategy, structure and a clear understanding of how lending conditions shape opportunities in the Sydney property and broader property market.
About the author – Alex Veljancevski is a Sydney Mortgage Broker with Eventus Financial, which assists first home buyers, investors, upgraders and borrowers seeking to refinance to a better deal on their home loan.