Interest Rate Cuts Drive First-Home Buyers Towards New Builds

Exploring the Trend of First-Time Buyers Opting for Newly Constructed Homes

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The Reserve Bank's recent rate cuts, bringing the cash rate down to 3.85%, have provided relief to mortgage holders and increased borrowing capacity for home seekers.

This development has led to a notable shift among first-home buyers towards new builds as a strategy to navigate the competitive property market.

In 2024, first-home buyer loans rose by 5.9% to 125,220, nearly matching the overall owner-occupier loan growth. With interest rates easing and more buyers utilizing grants and guarantees, first-home buyer loans are projected to increase by a further 6.5% in 2025 to 133,308.

However, the increased borrowing capacity has also intensified competition, particularly in the established property market. As a result, many first-time buyers are turning to new builds, which often offer more affordable entry points and the potential for government incentives.

Prospective buyers should consider the benefits and challenges of purchasing new builds, including construction timelines and potential delays, to make informed decisions aligned with their financial goals.

Published:Friday, 9th Jan 2026
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

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Knowledgebase

Adjustable-Rate Mortgage (ARM) Cap:
A limit on how much the interest rate or the payment can change for an Adjustable-Rate Mortgage.

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