First-home buyer reality check: What's changed in 12 months?

Key takeaways

• If you stepped away from the market last year, some conditions may have changed since then

• Property prices, listings, auction activity and government support have all shifted in different ways

• Your borrowing position and overall buying position may look different than they did 12 months ago

• Before ruling yourself out, it may be worth checking today's numbers rather than relying on last year's assumptions

Many first-home buyers stepped away from the property market over the past year. That's understandable. Interest rates rose, affordability remained stretched, auctions were competitive, and buying a first home may have felt further out of reach than ever.

If you decided to press pause, you certainly weren't alone. But property markets don't stand still. Neither government schemes, listings, buyer competition or your own financial circumstances.

So before assuming nothing has changed, it may be worth asking one simple question:

Are you still making decisions based on last year's market?

That doesn't mean buying has suddenly become easy. Interest rates remain higher than they were a year ago, lender assessments are still cautious, and affordability continues to be a challenge for many Australians.

But enough has changed across the market to make a fresh reality check worthwhile. The biggest change may not be whether it's easier to buy. It may be whether you're still looking at today's market through yesterday's numbers.

That's something Daniel Awkar, Retail Broker at Aussie Prospect, says he sees in conversations with first-home buyers who paused their search.

"I've had customers whose property search started 18 to 20 months ago, but they paused because they didn't want to pay what they thought homes were worth at the time," Daniel says.

"Twelve months later, they ended up buying a smaller home for the same price the larger homes had been selling for when they first started looking."

Daniel's experience highlights an important point: even if waiting was the right decision at the time, it's worth reassessing your position rather than assuming the market has remained unchanged.

Your first-home buyer reality check

Are you still using last year's numbers?

If you ruled yourself out of the market six or twelve months ago, that may have been the right decision based on what you knew at the time. But the same answer may not apply today.

The first step isn't deciding whether to buy. It's making sure you're working from current information rather than old assumptions.

Take interest rates, for example.

The Reserve Bank of Australia (RBA) already increased the cash rate three times during 2026, lifting it from 3.60% in December 2025 to 4.35% by May 2026.

Those increases continue to affect borrowing costs and household budgets.

At the same time, the Australian Prudential Regulation Authority (APRA) has kept the mortgage serviceability buffer at 3 percentage points, meaning lenders continue to assess borrowers against repayments above the actual interest rate they're applying for.

In other words, borrowing assessments remain cautious. So, while some parts of the property market have shifted over the past year, borrowers shouldn't assume their borrowing capacity has automatically improved.

That's why the latest RBA decision can be a useful prompt to revisit your numbers.

Even if interest rates haven't moved in your favour, understanding your current borrowing position can help you make decisions based on today's market rather than yesterday's.

The RBA held the cash rate at 4.35% at its June 2026 meeting. While a rate hold doesn't remove affordability pressures, it provides a timely opportunity for first-home buyers to revisit their borrowing capacity, repayment comfort zone and target suburbs using current information.

One point is worth remembering. Your borrowing position is only one part of your overall buying position.

While borrowing capacity may remain constrained by higher interest rates and lender assessment settings, other parts of the market, including listings, competition, government support and your own financial circumstances, may have changed since you last looked.

That's why a fresh reality check can be worthwhile. One place to start is by looking at how conditions have changed in the areas you're considering.

You might also be interested in: Why some buyers may have more room to negotiate in today’s property market

Has the market changed where you want to buy?

If it's been a while since you last attended an open home or auction, the market you remember may not be exactly the same today. That doesn't mean getting into the market has suddenly become easier.

But it does mean some conditions have shifted in ways that may be worth understanding before deciding whether to keep waiting. One example is property prices:

Recent Cotality Home Value Index data shows national dwelling values were broadly flat in May 2026. Sydney values fell 0.9% during the month and Melbourne fell 0.8%, while Perth and Darwin continued to record growth.

That reinforces an important point for first-home buyers: Australia isn't one property market. Conditions continue to vary by city, suburb and property type.

Some markets have seen price momentum soften, while others remain competitive. So rather than relying on national headlines, it may be more useful to understand what's happening in the suburbs you're actually considering.

If you've been assuming prices are still moving in the same direction they were a year ago, it may be worth checking the latest data for your target area.

You may have more properties to choose from

Another change over the past year has been the number of homes available for sale.

SQM Research reported that total residential property listings increased by 10.4% month-on-month in May 2026, reaching 258,803 properties nationally.

New listings were also 12.0% higher than the same time last year, marking the first annual increase in available housing stock in more than a year.

More listings don't automatically make homes more affordable. However, they can change the buying experience.

For first-home buyers, more available properties may mean:

• more homes to compare before making a decision

• more recent sales to help understand local prices

• more opportunity to explore different suburbs or property types

• less pressure to rush into the first suitable property

For buyers who paused because they felt they had too few options, this may be one area worth revisiting.

You might also be interested in: Could fewer investors mean less competition for home buyers?

Some properties may be taking longer to sell

SQM Research also reported that older residential listings increased by 10.5% month-on-month in May 2026, although they remained below levels recorded a year earlier.

Older listings don't necessarily mean a market has slowed dramatically. But they can indicate that some properties are taking longer to sell than they were previously. For buyers, this can be useful information.

A property that has remained on the market for longer may provide an opportunity to ask questions about comparable sales, understand vendor expectations and negotiate with more confidence.

That won't apply to every property or every suburb. However, it highlights why looking at current market conditions can be more valuable than relying on assumptions from several months ago.

Could auctions feel different today?

For many first-home buyers, auctions can be one of the most intimidating parts of the buying journey.

If you've previously been outbid or watched prices climb well beyond expectations, it's understandable to assume the experience hasn't changed.

Recent auction data suggests conditions may look different in some markets.

Cotality's Property Market Indicator reported a preliminary combined capital city clearance rate of 51.1% for the week ending 7 June 2026, the lowest preliminary result since April 2020.

Weekly auction results can fluctuate depending on volumes and seasonal factors, but lower clearance rates can indicate a greater number of passed-in properties and more post-auction negotiations.

That doesn't mean buyers suddenly have the upper hand. Competition remains strong for many desirable properties.

But if your only experience of buying was the highly competitive market of the past few years, it may be worth checking whether auction conditions in your preferred suburbs feel the same today.

Some buyers may find there's a little more room to pause, compare properties and stick to the budget they've set.

You might also be interested in: Why falling clearance rates could be the signal investors have been waiting for

Could there be less competition than when you last looked?

Another assumption many first-home buyers make is that investor competition has remained exactly the same. The latest data suggests the picture is more nuanced.

Australian Bureau of Statistics Lending Indicators show investor loan commitments fell 5.3% quarter-on-quarter in the March quarter of 2026, although they remained 18.8% higher than a year earlier.

The value of investor lending also declined 3.0% over the quarter but remained 25.3% higher year-on-year. In other words, investors haven't disappeared from the market. But activity has softened compared with the previous quarter.

At the same time, the Australian Government has announced proposed changes to negative gearing and capital gains tax that are intended to apply from 1 July 2027, although these measures are not yet law.

Some investors may choose to reassess future purchases as more detail becomes available.

For first-home buyers, the key takeaway isn't that investor competition has vanished. It's that market conditions may not be exactly the same as they were when you last searched.

That makes it even more important to base decisions on current information rather than assumptions carried over from last year.

Could you qualify for support you didn't have before?

If you last looked into buying a first home a year ago, it's also worth checking whether government support has changed.

For some buyers, eligibility may look different today than it did when they first started researching their options. One example is the Australian Government's 5% Deposit Scheme.

Since 1 October 2025, the scheme has expanded to remove income caps and waitlists for eligible first-home buyers.

Eligible buyers may be able to purchase a home with a minimum 5% deposit and no Lenders Mortgage Insurance (LMI), while eligible single parents and legal guardians may be able to buy with a minimum 2% deposit.

The scheme remains subject to eligibility criteria, participating lender requirements and property price caps.

For example:

Source: Housing Australia

If your deposit felt too small when you last looked, it may be worth checking whether you now meet the latest eligibility requirements.

Eligibility criteria, property price caps, participating lender requirements, and lending criteria apply. Buyers remain responsible for repayments and other purchasing costs.

You might also be interested in: First home buyer grants and concessions in Australia – What support is available in 2026

Your circumstances may have changed too

While it's easy to focus on what's happening in the property market, your own financial position may also look different from 12 months ago.

Perhaps you've received a pay rise, maybe you've added to your savings, or you've paid down a credit card or personal loan.

According to the Australian Bureau of Statistics, wages increased 3.3% over the year to the March quarter of 2026.

At the same time, the ABS also reported that the household saving-to-income ratio declined from 7.0% to 6.2%, highlighting that many households continue to face cost-of-living pressures.

It's not just your finances that may have changed. The way some lenders assess applications can change over time too.

Ruth Van Eekelen, Franchisee at Aussie Bellarine, says buyers who paused their search may also find that some lender policies have changed since they last checked their borrowing position.

"Some lenders have updated how they assess HELP debts, and we've also seen policies introduced that may allow income from renting out a spare room to be considered in some circumstances," Ruth says.

"If we assessed your borrowing capacity before these policy changes, it may be worth revisiting because your position today could be different."

The point isn't that everyone's financial position has improved, or that borrowing capacity has automatically increased.

Rather, it's that your circumstances, together with the lending environment, may no longer be exactly the same as they were when you last assessed your options.

That makes it worth checking today's numbers rather than relying on assumptions from months ago.

Before ruling yourself out, do one more reality check

If you've been waiting for the "right" time to buy your first home, it may be worth asking a different question. Instead of: "Has the market changed?" Ask: "Has my overall buying position changed?"

Before restarting your search, consider checking:

Your borrowing position

Revisit your borrowing capacity using today's interest rates, income, expenses and existing debts.

Your repayment comfort zone

Rather than focusing only on how much you may be able to borrow, think about what level of repayments would comfortably fit your budget.

Your deposit and upfront costs

Review your savings, estimate upfront buying costs, and check whether you've moved closer to your deposit goal.

Your eligibility for support

Check whether you now qualify for government support schemes or state-based grants and concessions that weren't available when you last looked.

Your target suburbs

Look at current listings, recent sales, auction activity and price movements in the suburbs you're actually considering. Conditions can vary significantly between locations.

You might also be interested in: Is income holding you back from home ownership or is it your strategy?

So, has it become easier to buy a first home?

There isn't a simple yes or no answer.

Interest rates remain higher than they were a year ago, lender assessments are still cautious, and affordability continues to be a challenge for many Australians. At the same time, some conditions have shifted.

There may be more properties to choose from in some markets. Auction conditions may feel less intense in certain areas. Government support has expanded for eligible buyers, and your own financial circumstances may have changed since you last looked.

None of that means buying a first home is suddenly easy. But it does suggest the market may not be exactly the same one you stepped away from.

None of that means buying a first home is suddenly easy. But it does suggest the market may not be exactly the same one you stepped away from.

If the only reason you've stopped looking is because you think nothing has changed, it may be worth checking whether today's facts still support that decision.

An Aussie Broker can help you review your borrowing position, repayment comfort zone, deposit, scheme eligibility and target suburbs using current information, so you can make your next decision based on today's market rather than last year's.

Frequently asked questions