First home buyers stage comeback as new loan size smashes previous record
11 Feb 2026
First home buyers have raced out of the blocks following the uncapping of the Home Guarantee scheme, with the value of these new loans increasing by a staggering 15.5% in the December quarter.
The latest Australian Bureau of Statistics (ABS) Lending Indicators, released today, show the value of first home buyer loans written in the last three months of 2025 hit $19.3 billion, the second-highest amount on record, with only the March 2021 result trumping this figure.
The number of loans for first home buyers also rose sharply on the back of the expansion of the Federal Government’s home buying scheme – up 6.8% compared to the previous quarter.
While this is the highest level since March 2022, it is still nowhere near the peak of 49,499 recorded in June 2009 when the Rudd Government’s super-sized first home buyer grants were at play.
First home buyer owner-occupier mortgages: December 2025 quarter
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| December quarter |
Quarterly change |
Annual change |
|
|---|---|---|---|
| Value | $19.3 billion | 15.50% | 22.40% |
| Number | 31,783 | 6.80% | 9.10% |
Source: ABS Lending Indicators Dec 2025, prepared by Canstar, seasonally adjusted figures.
Looking across the states, New South Wales saw the largest increase in first-home buyer loans, followed by Western Australia and the ACT.
Number of first home buyer loans by state, December quarter
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| Amount | Quarterly change |
Annual change |
|
|---|---|---|---|
| NSW | 7,750 | +11% | +19% |
| VIC | 10,283 | +4% | +7% |
| QLD | 6,099 | +6% | +8% |
| SA | 1,912 | +5% | +3% |
| WA | 3,811 | +10% | +3% |
| TAS | 595 | -2% | +18% |
| NT | 255 | +3% | +13% |
| ACT | 893 | +7% | +27% |
Source: ABS Lending Indicators Dec 2025, prepared by Canstar. Number of owner occupier new loan commitments, seasonally adjusted figures.
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Investors bolstered, rather than deterred, by rise in first home buyer activity
Across the market, new mortgages reached a record high, with $108 billion in commitments in the last three months of the year.
While first home buyer owner-occupiers rose by the greatest amount in percentage terms, investor lending posted a strong rise of 7.9%, taking the total value of investor loans written in the quarter to $43 billion – a record high for this subset of borrowers.
Value of new mortgages, December quarter 2025
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| Loan type |
Amount | Quarterly change |
Annual change |
|---|---|---|---|
| Owner-occupiers – first home buyers |
$19.3 billion | 15.50% | 22.40% |
| Owner-occupiers – excl. first home buyers |
$45.5 billion (Record high) |
6.50% | 16.90% |
| Investors | $43.0 billion (Record high) |
7.90% | 31.80% |
| Total | $108.3 billion (Record high) |
9.50% | 23.50% |
Source: ABS Lending Indicators Dec 2025, prepared by Canstar. Value of new loans based on seasonally adjusted figures.
Average new loan size hits a new record high
The average new loan size for owner-occupiers has hit a record high of $736,000, according to the ABS data. This was an increase of $42,000 in the quarter, likely fuelled by the three RBA cash rate cuts. That’s an estimated increase of $457 a day.
NSW has the largest average new loan size for owner-occupiers at $873,000, a new record for the state, after a rise of $44,000 in the space of three months.
Western Australia hit a record high of $688,000, recording the biggest growth out of the states and territories in both percentage and dollar terms, with an increase of $55,000 or 9% in just one quarter.
All data is in original terms and rounded to the nearest $1,000.
Average new owner-occupier loan size
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| Loan size |
Quarterly change |
Annual change |
|
|---|---|---|---|
| Australia | $736,000 | +$42,000 +6% |
+$70,000 +11% |
| NSW | $873,000 | +$44,000 +5% |
+$63,000 +8% |
| VIC | $677,000 | +$30,000 +5% |
+$45,000 +7% |
| QLD | $736,000 | +$49,000 +7% |
+$101,000 +16% |
| SA | $658,000 | +$42,000 +7% |
+$79,000 +14% |
| WA | $688,000 | +$55,000 +9% |
+$89,000 +15% |
| TAS | $504,000 | +$20,000 +4% |
+$30,000 +6% |
| NT | $515,000 | +$33,000 +7% |
+$50,000 +11% |
| ACT | $659,000 | +$30,000 +5% |
+$9,000 +1% |
Source: ABS Lending Indicators Dec 2025, prepared by Canstar. Average loan size based on original terms for owner-occupier dwellings, excludes refinancing and is rounded to the nearest $1,000.
Refinancing hits a record high
The number of mortgages switching to a different lender dropped slightly by 0.4%, however, refinancing activity was still relatively high with an average of almost 35,000 mortgages switching a month across October, November and December.
This elevated switching activity, combined with the fact that many borrowers are carrying around jumbo mortgages, saw the value of refinancing hit a new record of over $68 billion in the December quarter.
Total number and value of externally refinanced mortgages
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| Amount (Dec 25 qtr) |
Change since previous quarter |
Year-on-year change |
|
|---|---|---|---|
| Number | 104,220 | -378 -0.4% |
+9,298 +10% |
| Value | $68.4 billion (Record high) |
+$2.2 billion +3% |
$9.9 billion +17% |
Source: ABS Lending Indicators Dec 2025, prepared by Canstar.com.au. Notes: number and value of refinanced loans includes owner-occupier and investor loans, seasonally adjusted data.
Canstar’s Data Insights Director, Sally Tindall, says, “The expansion of the Home Guarantee scheme has fired up the first home buyer market, with thousands more securing a foot on the property ladder in the space of three months.”
“The value of new loan commitments from first home buyers surged by more than 20 per cent compared to the same time a year ago, with a mammoth $19 billion in loans secured in the December quarter.
“However, a surge in buyers, a rise in borrowing power, thanks to the three cash rate cuts in 2025, and a government proactively encouraging Australians to borrow with as little as 5 per cent deposit, can only mean higher prices and more debt.
“While the federal scheme makes it easier for many first home buyers to get on the ladder with a small deposit, it certainly doesn’t mean the commitment and responsibility of repayments is any easier, particularly now we’ve had a U-turn back to interest rate hikes.
“It’s absolutely no surprise or coincidence that the average new loan size for owner-occupiers has hit a new record high – rising by a hefty $42,000 in the space of three months.
“The average new loan size for an owner-occupier now sits at an astronomical $736,000. That’s not the property price, but the size of the debt people are agreeing to take on.
“If loan sizes continue to escalate at this pace, generations to come whose families aren’t yet on the property ladder could well see themselves locked out permanently.
“The latest ABS data smashed all manner of records in the December quarter with the value of owner-occupier and investor loans hitting new record highs.
“Investors haven’t been deterred by this fresh wave of new property owners – they’re buoyed by it – because more buyers typically equals greater opportunity for capital growth, with the value of new investor loans rising by almost 8 per cent in the quarter.
“What’s fantastic to see in this dataset, is that refinancing activity still remains elevated, with a record $68 billion worth of loans switching to a different lender in the last quarter of 2025.
“While RBA cuts often push people to check their rates and consider refinancing, RBA hikes are usually an even bigger motivator. This latest increase should encourage greater switching and a corresponding step up in competition in the market.”
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This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
