What’s the best state for first home buyers?


We know that first home buyers are at the lowest level for over 10 years and at the same time the level of investors finance commitments reached a record peak of 49%.

This has led some to suggest that first home buyers are being pushed out of the market by ugly property investors,  but that’s not really true.

In fact the latest Genworth Streets Ahead Home Buyer Consumer Confidence Index shows 71% of first home buyers think the Australian dream of owning a home is realistic.

At the same time many  would be first-time buyers are choosing to rent in locations where they would enjoy living, but can’t afford to and become renting property investors instead.

PRDNationwide recently looked at the  question of where is the best state for the buyers.


Here is what they said:

Increased investor activity may indicate improved market sentiment but it has dire consequences to first home buyers. 

Stock typically purchased by first timers is increasingly being snapped up by investors, leaving a generation of buyers struggling to get a foot on the property ladder.

To combat this, state governments across Australia provide assistance, mainly in the form of grants and stamp duty concessions.

So the question becomes:

What are state governments doing to lend a helping hand and is it enough?

Our methodology to answer this question is as follows: take the available government grants that are available and calculate them as a percentage of the median purchase value of a unit (a price point typically targeted to young buyers); plus the stamp duty that a first homebuyer would have to pay.

The deposit is then calculated based on 10 % of the purchase value, the amount typically required when acquiring a newly built property.

The deposit

Hobart is clearly the capital city that first homebuyers should flock to with the Tasmanian State Government grant representing 10.2 per cent of the purchase value plus transfer costs. The deposit required is also notably small compared to other states even when taking into account the average salary of $45,000 for the 25-34 year old age bracket in Hobart.

Meanwhile Melbourne has the lowest level of assistance, representing only 1.9 % of the purchase price. This is due to stamp duty discounts (rather than a full concession), one of the lowest grants available and a high median price.

Interestingly, the past 5 years has seen a shift in the grants so they are now only available on new dwellings across Australia.

This means that buyers are limited to product type, location and price.


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Brett Warren is Director of Metropole Properties Brisbane and uses his 13 plus years property investment experience to advise clients how to grow, protect and pass on their build their wealth through property. Visit: Metropole Brisbane

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