First home buyers are borrowing record amounts to enter the property market, with the average loan size jumping 8.5 per cent in a single quarter to $607,624 – the largest quarterly increase on record.
The Australian Bureau of Statistics lending indicators show more than 31,780 first home buyer loans were written in the final three months of 2025, a 6.8 per cent increase on the previous quarter and 9.1 per cent higher than the same period in 2024.
But it’s the value of those loans that tells the real story – up 15.5 per cent quarter-on-quarter, far outpacing the rise in loan numbers.
“The Australian government 5 per cent deposit scheme has increased the eligibility criteria for first-home buyers and we are seeing the early effects of this in our data,” ABS head of finance statistics Mish Tan said.
“This was the largest rise in the number of first homebuyer loans since the December quarter 2023.”
NSW led the charge with a 10.9 per cent increase in first home buyer loan numbers, followed by Western Australia at 9.8 per cent and the ACT at 7.1 per cent. Only Tasmania recorded a decline.
The broader housing lending market showed similar strength.
Total new loan commitments rose 5.1 per cent in the quarter to 149,434 loans, while the value of those commitments climbed 9.5 per cent to $108.3 billion.
Investors have been particularly active, with more than 60,000 investor home loans written in the quarter – a 23.6 per cent increase on the same period in 2024.
The value of investor lending rose 31.8 per cent year-on-year to $43 billion.
The competitive lending environment has also sparked a refinancing wave.
Across 2025, mortgage refinances jumped 20 per cent to 640,137 loans, with nearly two-thirds involving a switch to a different lender.
“More homeowners than ever before renegotiating their mortgage or switching lenders shows how fiercely competitive Australia’s home loan market is,” Australian Banking Association chief executive Simon Birmingham said.
“It’s clear Aussies have their eye on the ball when it comes to shopping around for a better deal.”
