First home buyer optimism at a peak: ‘perfect time’ to join the market

With the market ‘bottomed out’ and interest rates at a record-low, first home buyers have gotten the green light to take out a home loan and snatch up their dream property. 

Domain’s latest figures show Aussies are flocking back to Sydney and Melbourne’s housing markets, with much higher auction clearance rates - or percentages of properties sold at auction - recorded for both cities this month compared to last July. 

Sydney’s preliminary clearance rate over the weekend stood at 73% after 342 auctions and 260 confirmed results, whereas this time last year, the clearance rate was just below the 50% mark.

Meanwhile, Melbourne’s weekend clearance rate led closely at 74% after 471 auctions and 364 confirmed results, up from 52% this time last year.

“Rising clearance rates, which usually have a correlation to property prices also rising, are an indication that the market overall is stronger,” Mozo’s Property Expert, Steve Jovcevski said. 

“A stronger market means first home buyers can buy property with more confidence that it’s an appreciating asset that will increase in value over time,” he added. “It gives them confidence that now is a good time to buy because they’re buying at the bottom of the market and that if they don’t buy now, they might miss out again.” 

RELATED ARTICLE: With property prices expected to 'bottom out', is now your time to buy? 

In fact, Commonwealth Bank research released earlier this month revealed a growing number of Aussies believe the dream of owning a property is more achievable than ever before, with 91% saying that it’s within reach for first home buyers. 

This is a significantly more positive response than 2018 when one in five Aussies thought property ownership was completely unattainable.  

And according to Jovcevski, the first home buyer’s optimism is well-placed. 

“Prices have become more realistic and lower,” Jovcevski said. “First home buyers can now borrow more because APRA has gotten rid of the 7% serviceability buffer, which means banks are willing to hand over a larger loan. And with the RBA’s back-to-back rate cuts, they can also lock in a great deal, as the market currently has variable rates of under 3% or really good fixed rates for 4 or 5 years.” 

“It’s actually a bit like a perfect storm for first home buyers at the moment, because all those factors are coming together to make it the perfect time for first home buyers to get into the market, especially in Sydney and Melbourne.” 

Keen to hop on board and purchase that house you’ve been eyeing for a while? Read our expert tips for first home buyers taking advantage of the market, or head over to our home loans comparison table to find a deal that suits you.

Home loan comparisons on Mozo

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Last updated 25 July 2024 Important disclosures and comparison rate warning*
  • Basic Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.22 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

  • OMG Home Loan

    • Owner Occupier
    • Principal & Interest
    • >80% LVR
    Interest rate
    6.29 % p.a.
    Variable
    Comparison rate
    6.32 % p.a.
    Initial monthly repayment
    $4,328
    Go to site

    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

  • Basic Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR 80-95%
    Interest rate
    6.75 % p.a.
    Fixed 3 years
    Comparison rate
    7.09 % p.a.
    Initial monthly repayment
    $4,540
    Go to site

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

  • Offset Home Loan

    • Fixed
    • Owner Occupier
    • Principal & Interest
    • LVR 80-95%
    Interest rate
    6.75 % p.a.
    Fixed 3 years
    Comparison rate
    7.30 % p.a.
    Initial monthly repayment
    $4,540
    Go to site

  • Special Real Deal Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR 80-95%
    Interest rate
    6.84 % p.a.
    Variable
    Comparison rate
    6.88 % p.a.
    Initial monthly repayment
    $4,582
    Go to site

    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • Basic Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.22 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

  • Offset Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.43 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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