First home buyers eager to snag bargains as property prices drop

first home buyer standing in front of her property

Times may be tough, but first home buyers aren’t giving up on their property ownership dream just yet. New research shows that over half of these Australians plan to make a purchase in the next 12 months.

ME’s latest Quarterly Property Sentiment Report released today found 51% of first home buyers want to have joined the property market by mid next year, up from 42% last quarter. 

And they’re the most eager of the bunch, with the report revealing that, by contrast, only 39% of investors and 22% of owner-occupiers share those same intentions.

Among first home buyers, the vast majority are looking to get their foot in the door by taking advantage of property price drops due to COVID-19. 

In fact, 82% of first home buyer respondents said they’re keeping their eyes peeled for bargain properties for sale, compared to 66% of investors and 57% of owner- occupiers.

These findings are based on surveys with 1,000 Australian homebuyers in June, when COVID-19 restrictions first began to ease across most states and territories. 

ME’s general manager of home loans, Andrew Bartolo said the surge in first home buyer enthusiasm could be due to a number of factors.

“First home buyers may be looking to find the silver lining in the current economic climate, thanks to greater potential for property price falls, record low interest rates and government support,” he said.

HomeBuilder and regions on the watchlist

In terms of government support, ME’s report reveals a large portion of first home buyers are considering the HomeBuilder scheme. This initiative offers $25,000 cash grants to eligible Australians to cover the costs of home building or renovation. 

Over half of first home buyers are keen to apply for the grants, compared to just 33% of existing homebuyers. 

As for where these first home buyers are house hunting, the report found many haven’t confined their search to metropolitan areas, where demand and valuations are typically higher. 

Instead, they’ve turned their sights to the regions, with two-thirds saying they’re more likely to buy a property there. 

“New remote and flexible working arrangements brought in to accommodate for COVID-19 have clearly influenced Australians’ sentiment towards buying in regional areas,” Bartolo said.

“It’s now a more feasible option for many and if prices are lower in those areas and you think it will improve your lifestyle - of course it’s an attractive option.”

Real estate optimism returns

While current economic conditions remain grim, Australian homebuyers are seeing some light at the end of the tunnel. 

According to ME’s report, positive sentiment about the property market now sits at 35%, up six points from the previous quarter, although it’s still well under the high of 39% reached back in the first quarter.

“The impact of COVID-19 negatively shifted consumer sentiment towards the property market in the second quarter of the year, but we started to see signs of optimism in June,” Bartolo said.

“Hopefully this renewed positivity and growing confidence is able to weather positive second waves of COVID-19 cases as we’ve seen in Victoria, which is no doubt increasing worry across the nation.”

Home loans looking attractive

Besides the HomeBuilder scheme and falling property prices providing rays of hope, home loan rates are also more competitive than they’ve ever been.

For instance, right now the average 2-year fixed rate in the Mozo database sits at 2.56% for owner occupiers, a whopping 119 basis points below where it was this time last year, and even better than the current average variable rate, according to Mozo’s home loan statistics page. 

Looking to buy your first home and take advantage of record low interest rates? Scroll down below to weigh up a few options, or jump over to our first home loans comparison table to compare even more deals.

Compare first home loans - last updated 13 August 2022

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

  • Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    3.74% p.a.variable for 12 months and then 4.23% p.a. variable
    4.22% p.a.

    Already includes July RBA rate increase. No monthly or ongoing fees. has some of the fastest settlement times on the market. They can meet 30-day settlement timeline so you can start saving thousands, as soon as possible! Mozo award-winning online lender, friendly and local Australian based team.

  • First Home Buyer Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    4.14% p.a. variable
    4.17% p.a.

    A low variable rate loan for home buyers. No establishment or ongoing fees to pay. 100% offset account included. Allows for unlimited repayments, redraws and flexible repayment options.

  • Variable Home Loan

    <80% LVR, Owner Occupier, Interest Only

    interest rate
    comparison rate
    Initial monthly repayment
    4.74% p.a. variable
    4.19% p.a.

    Fast online application with no fees. Free extra repayments and redraw facility. Min 20% deposit.


* 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, loan amount and term entered. 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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