Home buyers shift borrowing strategies as cost of living pressures bite

A growing number of first home buyers are going it alone or seeking government assistance to get their foot onto the property ladder, new CommBank data reveals.

Property ownership remains an ambition for many Australians, with a growing proportion of first home buyers even choosing to go it alone when taking that initial step onto the property ladder, new data from CommBank has revealed.

According to the data, 40 per cent of first home buyers purchased a property alone (rather than with a partner, friend or family member) in the first six months of 2024, up from 35 per cent in 2019.

Despite an increasing number of first home buyers choosing to purchase property alone, data from the bank also found the proportion of first home buyers using government-funded guarantees has increased in recent years. Between FY21 and FY24, use of first home buyer guarantees soared 45 per cent.

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Executive General Manager Home Buying at CBA, Dr Michael Baumann, said: "With property prices rising consistently and the current cost of living pressures, it is not surprising to see first home buyers looking at all of the options available to them - be it via innovative loan types, loan policy or government grants and incentives - in order to acquire their first home.

"CommBank is an active participant in all of the different government guarantee schemes, and our network of lenders are well positioned to help first home buyers navigate the process of buying a home and applying for the relevant grants.

"We've helped thousands of first home buyers access the appropriate government grants or take advantage of our innovative product solutions - like Property Share - in order to achieve their property ownership ambitions. Property Share allows home buyers and investors to split the cost of buying a home with family or friends while retaining individual control of their finances," Dr Baumann added.

Across Australia, the national average first home buyer home loan size was $497,692 in FY24.

Metro first home buyers had an average home loan size of $529,642 compared to $403,203 for regional based first home buyers. While the average loan size for regionally based first time buyers was lower than those buyers based in the cities, their average loan to value ratio (LVR) was higher.

According to CBA data, the average LVR for regionally based first time buyers was 86 per cent in FY24 - higher than the 82 per cent average LVR for those first-time buyers who purchased in the cities.

"As Australia's biggest lender, with a footprint that stretches right across the country, we are well placed to help first home buyers achieve their property ambitions, regardless of where they are looking to buy," Dr Baumann said.

"We know that on average, regional properties are cheaper than metro-based dwellings and often sit on larger land lots - which could be attractive especially for some customer segments. Given the greater level of housing affordability in the regions, these areas often provide first home buyers with the perfect opportunity to take their first step into the market.

"We can provide customers with access to a range of competitive products, and tools to help them in their home buying journey. Home Hub - located in the CommBank app - is just one of the tools property buyers can leverage to make their home buying experience more streamlined and simple. Via Home Hub, customers can access calculators to understand their borrowing power, estimated repayments, and upfront costs. In addition, they can use Home Hub to understand the estimated value for a property, access tailored offers, as well as support material to guide them on their property journey and book an appointment directly with a lender."

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