28,358 First Home Buyers Enter NSW Market Amid Affordability Pressures

Despite challenges posed by high interest rates and escalating home prices, Western Sydney continues to be a prime destination for first home buyers. RWC Western Sydney’s latest Residential Development Insight Report reveals that 28,358 first-time buyers entered the New South Wales market over the past year, highlighting the resilience of this segment amid affordability pressures.

“The appetite for homeownership is evident, but affordability pressures are shifting buyers west,” said Peter Vines, Managing Director of RWC Western Sydney. “Western Sydney is only beginning its growth trajectory, but meeting demand with affordable, accessible options is essential.”

With increasing competition and limited housing supply in Sydney’s central areas, Western Sydney offers a more feasible option for first-time buyers seeking to enter the property market. The report notes that the average loan size in New South Wales now hovers around

$800,000, aligning closely with the state’s stamp duty exemption thresholds, which is helping to facilitate ownership among new buyers.

The region’s rental market pressures are also contributing to this shift, as Outer Sydney and Middle Sydney experience vacancy rates as low as 1.4 percent and 1.5 percent, respectively. With rental options increasingly limited, many are looking towards homeownership as a more stable long-term solution.

Construction costs, while still high, show some signs of moderation. Material costs have slowed to an annual increase of 1.52 percent, a welcome development, though labour constraints continue to be a significant factor. Meanwhile, in the South West precinct, approvals have surged by over 5,000 dwellings within six months. However, these projects remain several years away from completion, further highlighting the need for immediate solutions to accommodate demand.

RWC Western Sydney’s report underscores that meeting the needs of first home buyers is critical not only for market stability but also for supporting the state’s long-term housing goals. As affordability challenges continue to shift buyers westward, the report calls for a strategic approach to maintain accessible, quality housing options in Western Sydney.

For more insights on the first home buyer market and housing trends in New South Wales, read the full report here.