Australia’s first-home buyers appear to be biding their time with the property market, as new data shows applications are falling despite government incentives and a softer housing market.
Host of The Australian’s Money Puzzle Podcast James Kirby told ABC News that recent Federal Budget changes had “scared” the housing market, with monthly figures among the weakest seen in some time.
“The surprise that I’m really baffled at is the number of first-home applications into the banks is dropping, it’s actually down 20 per cent according to Aussie Home Loans,” Kirby said.
“It’s really quite baffling. If the house prices are coming down, so the deposit you got to pay for your first home is coming down … but people aren’t taking it up, which is the last thing you might have expected following all the changes that were in the budget.”
Lendi Group, which operates Aussie Home Loans, reported a more than 20 per cent decline over the six weeks to July 3 due to the tax changes.
Kirby said he had expected more potential buyers to make a move given the range of first-home buyer schemes and grants available.
One theory behind the decrease is young Australians are waiting to see just how far the market will fall. But Kirby warned the opportunity to “grab it while you can” can be limited, and he said he had expected first home buyers to “be moving at this point”.
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James Kirby is ‘really baffled’ by the number of first-home applications to banks dropping. Source: ABC News
Cost of mortgage remains a key barrier
The comments come as first-home buyer applications are reportedly down 20 per cent, raising questions about whether government support measures are enough to overcome broader affordability concerns.
While falling property prices can reduce the deposit buyers need, experts say the cost of servicing a mortgage remains a major barrier.
Higher repayments, rising household expenses and uncertainty about the economic outlook are weighing on many aspiring homeowners.
First home buyers account for almost half of purchase applications
Despite the slowdown, first-home buyers remain a significant part of the housing market.
Aussie Home Loans’ latest lending data shows first home buyers accounted for about 47.5 per cent of purchase applications, with the median first-home purchase price sitting around $720,000.
However, those who are managing to enter the market are taking on larger loans.
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Aussie Home Loans’ latest lending data shows first-home buyers accounted for about 47.5 per cent of purchase applications. Source: Lisa Maree Williams/Getty Images
(Lisa Maree Williams via Getty Images)
Meanwhile, Equifax data shows that average first-home buyer loan and inquiry amounts have increased substantially since 2021, while participation has declined in some states.
The changing market has also seen the profile of first-home buyers shift, with more Australians delaying ownership until later in life as they save larger deposits and manage higher borrowing costs.
Figures from the Australian Bureau of Statistics show 31,783 first-home buyer loans were approved in the December quarter of 2025, up 6.8 per cent on the previous quarter.
Based on quarterly lending data, an estimated 120,000 to 125,000 first-home buyer loans were issued nationwide across the year.
The average first-home buyer is now aged around 34, highlighting that many Aussies are purchasing their first property in their late 20s and 30s.
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