Professionals Real Estate 
Buying your first home is a big step, and 2025 presents opportunities and challenges if you are thinking of entering the property market for the first time.
With stabilising interest rates, supportive government incentives and evolving market conditions, understanding the landscape and knowing which steps to take can make all the difference in your home-buying journey.
What’s new for first home buyers in 2025?
The Australian property market has shifted over recent years, with high interest rates in 2024 giving way to anticipated cuts in 2025. This change could bring renewed competition, but it also offers an opening for savvy buyers who prepare early.
Key trends to watch in 2025:
- Interest rates: The Reserve Bank of Australia is expected to lower rates at some stage in 2025, potentially boosting borrowing power for first-time buyers. When you calculate your repayments and research your borrowing power, remember that lenders have to factor in a buffer that would see you still able to afford your mortgage if rates happen to increase.
- Stabilising prices: Property prices have reportedly flattened in many areas, creating a more balanced market with opportunities for negotiation.
- Government Incentives: Schemes like the First Home Owner Grant (FHOG) and the First Home Guarantee continue to support new buyers, particularly if you have a smaller deposit. Speak to your broker about how these incentives could work for you.
Steps to Take Before You Buy
Being prepared is the key to success as a first home buyer. Follow these steps to streamline your path to homeownership:
Define your budget: Understand your financial position, including your savings, potential borrowing capacity, debt and ongoing expenses. Tools like mortgage calculators can help, but consult with a mortgage broker for personalised advice.
Create a budget and stick to it so you have a clear idea of your living expenses, and take as many steps as you can to reduce your debt (this improves your borrowing power).
Save for your deposit
Most lenders require a deposit of at least 5-20% of the property price. The more you save, the less you’ll need to borrow, reducing your repayments. You can potentially take advantage of schemes like the First Home Super Saver Scheme (FHSSS) to boost your deposit savings through tax benefits.
Secure loan pre-approval
Getting pre-approved for a home loan helps you understand how much you can borrow and makes you a more attractive buyer. This process can take some time and require different documentation so it’s good to start a few months before you plan to buy. If you can have evidence of your savings, income and debts ready, all the better.
Research the market
Investigate areas that align with your budget and lifestyle. Consider factors like proximity to work, schools, amenities and potential growth.
If you can’t afford to buy where you want to live, think outside the box. It may make sense to buy a place and lease it out, and rent in a suburb you love. This will take some planning and conditions may apply if you receive a first home owner grant or stamp duty exemption, so speak to your broker to work out a strategy.
Plan for additional costs
Buying a home involves more than just the deposit. You’ll need to account for costs like stamp duty, legal fees, conveyancing and building inspections. Some first-home buyer incentives can help reduce these expenses.
Navigating the buying process
Once you’ve done your homework, it’s time to start searching for your first home. Here’s how to navigate the buying process:
- Work with Professionals: Engage a trusted real estate agent to help you find properties that meet your needs. A solicitor or conveyancer will also be necessary to guide you through contracts and legal requirements.
- Attend inspections: Visit properties in person to assess their condition and suitability. Don’t be afraid to ask questions about the home’s history and features. When you find a home you love, book a property inspection so you can be forewarned about any issues such as structural problems, pests or non-compliance decks, etc.
- Make an offer: Once you find the right property, submit an offer within your budget. Be prepared to negotiate, but set a firm limit to avoid overcommitting.
- Finalise your loan: After your offer is accepted, your lender will complete the loan process, including a property valuation. Then you’ll be on your way to settlement, which is the day when contracts are finalised and you receive the keys to your new place.
Common Mistakes to Avoid
As a first-time buyer, it’s easy to feel overwhelmed. Avoid these pitfalls to keep your journey on track:
- Overextending your budget: Stick to what you can afford, even if you qualify for a higher loan amount.
- Skipping inspections: Always get a professional inspection to uncover any hidden issues.
- Failing to factor in long-term costs: Think about ongoing expenses like maintenance, rates and insurance. Make sure these fit within your budget.
Is 2025 the right time to buy?
With interest rates likely to drop and property prices relatively flat for the time being, the start of 2025 offers a positive environment for first-home buyers. Acting early in the year may give you an advantage before competition intensifies.
Best of luck! Your home is an asset that has the power to set you up for a positive financial future. Stay focused on your goals, leverage the support of industry experts and you’ll get there.
Need help to find your first home? Contact your local Professionals agent today.
