Recent data show first-home buyers are flocking to Melbourne at roughly twice the national rate. Four Melbourne suburbs – Maroondah, Brimbank, Casey’s North and Knox – rank among Australia’s top five hotspots for new owners. In fact, almost half of the country’s top 20 first-home buyer suburbs are in Melbourne’s outer areas. This demand is clear in the lending figures: Victoria now accounts for the largest share of new first-home buyer loans of any state.
Melbourne’s strong appeal largely comes down to affordability. The PropTrack/CBA report notes that a median-priced home in Melbourne is currently cheaper than in Adelaide, Brisbane or Perth. Lower-cost outer-city and new-development suburbs keep prices down. Crucially, many more Melbourne properties fall under the federal Home Guarantee (5% deposit) scheme caps, meaning a 5% deposit loan (without LMI) is available on far more homes here. In practice, this gives first-home buyers greater buying power in Melbourne compared to other capitals.
Despite tougher lending rules, first-home buyers have help. The report highlights that even though saving a 20% deposit now takes longer than for past generations, government support can bridge the gap. By using grants, low-deposit loans or lender’s mortgage insurance, first-home buyers can overcome the deposit hurdle and get into a home sooner. Buyers may also consider strategies like buying newly built homes or “rentvesting” (renting in a preferred area while owning elsewhere) to stretch their budget.
- Use government schemes. Make the most of grants, the Home Guarantee (5% deposit) and other low-deposit programs to cover your upfront costs.
- Consider smart buying strategies. Look at new-build homes or rentvesting as a way to enter the market sooner.
- Get pre-approved and structured. A mortgage broker can arrange a home loan pre-approval, negotiate lower-deposit loans and help structure your loan (e.g. using offset accounts or interest-only periods) to maximise your borrowing power.
At Be Smart Finance, our analysis suggests home values could rise by around 6% by the end of 2025. This means buyers may have only about a year before rising prices start to offset the benefits of today’s interest rates. Acting sooner gives you a better chance of securing an affordable purchase in Melbourne’s hotspots. In other words, moving early into these Melbourne hotspots means a better chance of locking in an affordable purchase.Get help from Be Smart Finance. At Be Smart Finance, our brokers guide first-home buyers (and investors) through these market shifts. We’ll calculate your borrowing power, compare home loan options and make sure you meet any scheme criteria. Call us on 0408 659 819 or book a free 30-minute consultation to learn how the expanded Home Guarantee Scheme (and other supports) can work for you.
