Money’s Mortgage Insights: QLD Bucks Slowdown in FHB Loans, but VIC Still Leads Annual Growth

Money.com.au has released the latest edition of its First Home Buyer Mortgage Insights report, highlighting key trends in Australia’s first home buyer loan market.  

See the full report on LinkedIn.  

First home buyer loans are sluggish but still up 9% from 2023 slump 

A total of 125,036 first home buyer (FHB) loans were issued in the year to March 2025. Annual growth slowed to 3.8%, down from 5.9% in the year to December 2024. 

FHB loan numbers remain 9.1% above the recent low of 114,639 loans recorded in the year to September 2023, when the RBA was hiking interest rates. 

Money.com.au’s Property Expert, Victoria McGavin, says the recovery in FHB loans has been surprising given the challenges first home buyers continue to face. 

“This modest recovery has been hard-won for first home buyers, who’ve faced every challenge under the sun the last few years. Between rising property prices, high interest rates up until now, tight lending conditions, and historically low housing supply and building approvals, it’s surprising the numbers have bounced back at all,” she says.  

“It shows that when governments step in with the right incentives — whether it’s increasing First Home Owner Grants or broadening stamp duty concessions, it makes a real difference in helping first home buyers get on the ladder.” 

Queensland’s first home buyer market bucks national slowdown 

Notably, Queensland was the only major state to record an increase in its growth rate, rising from 6.5% to 6.9% year-on-year. Annual growth declined in all other major states. 

McGavin says Queensland’s performance reflects both affordability shifts and growing buyer confidence in the state.  

“Queensland is benefiting from interstate migration, relatively better affordability compared to NSW, and renewed buyer confidence, especially among first home buyers who are adjusting to the new interest rate environment,” she says. 

“It’s the only major market where first home buyer growth is picking up pace, and that’s being matched by a surge in borrowing power and price expectations.” 

QLD first home buyers now borrow more than Victorians 

Queensland has overtaken Victoria to record the second-highest average owner-occupier loan size for first home buyers, at $524,169 compared to Victoria’s $517,930. This marks a jump of nearly $55,000 from $469,391 a year earlier in QLD. It was also the second-largest increase in average loan size, rising 11.7% over the year. 

But, it was Western Australia that recorded the largest annual increase in average owner occupier loan size, rising 14.1% — from $429,362 to $489,894, a jump of more than $60,000. 

Nationally, the average loan size for first home buyer loans has reached $538,342, rising 5.8% over the past year. 

Victoria still leads in first home buyer activity  

Victoria continues to lead the nation in terms of annual growth rate, with FHB loan numbers up 7.6% to 40,063 — although this is down from 10.4% in the previous period. 

It also leads in the FHB owner occupier segment, recording an 8.4% annual increase — down from 11%. Queensland followed with a 7% growth rate, up from 6%. 

Overall, the FHB share of the owner occupier market remains steady at 36%, with Victoria holding the highest share at 40.7%. 

NSW dominates as more first home buyers become investors 

At 7,859 loans annually, the investor segment of first home buyer lending remains relatively small but is an emerging area of activity, particularly as house prices continue to rise across Australia. It now represents 6.3% of the total FHB loan market — a share projected to grow to 10% by 2035 based on current trends. 

McGavin says first home buyers are increasingly considering the benefits of rentvesting as a strategy.  

“There’s a growing cohort of first home buyers who understand the tax advantages, rental income potential, and greater borrowing flexibility that come with purchasing an investment property first. It’s becoming more mainstream and less of a niche strategy,” she says.  

New South Wales remains the top choice for first home buyers looking to invest, with investor loan numbers rising 8.8% annually — although growth has more than halved compared to the 21% increase recorded the previous year.  

NSW accounts for over a third (34.7%) of all first home buyer investor loans nationally and continues to grow its dominant share. Together, the Eastern states — NSW, Victoria, and Queensland — account for over three-quarters (77.2%) of the FHB investor market, while the remaining states make up just 22.8%.