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Opening the door to your first home A guide to buying in New South Wales Market insights, buying pathways, government incentives and practical advice to help you navigate your first property purchase.

Welcome Your guide to buying with confidence Buying your first home can be a major milestone, but it can often feel overwhelming. From saving a deposit and understanding your borrowing power, to choosing the right property and navigating the buying process, there are many decisions to make along the way. There are now a variety of support programs available to help first home buyers enter the property market. Government incentives, deposit guarantee schemes and alternative ownership pathways can help eligible Australians overcome some of the common hurdles to home ownership and take their next step. This guide combines practical buying advice with local market insight to help you better understand the opportunities and make informed decisions throughout this exciting home buying journey.

First home buying in NSW today The market at a glance First home buyers are still finding a way into the market

Demand remains strongest in more affordable housing segments

Despite higher interest rates and rising property prices, first home buyers remain an important force in the NSW property market. In fact, first home buyer activity has strengthened over the past decade, supported by evolving ownership pathways and continued demand for affordable housing.

Many first home buyers continue to focus on apartments, outer metropolitan locations and regional markets where entry prices can be more accessible. Lower-priced properties continue to attract strong demand

34% of owner-occupier lending is now going to first home buyers

Annual growth across the lower quartile housing markets highlights ongoing competition for affordable homes, reinforcing the importance of understanding your budget and being prepared to act when opportunities arise.

This means more than one in three owner-occupier home loans in NSW are being taken out by first home buyers, highlighting the continued participation of new entrants in the market.

Key takeaway First home buyer loan activity increased 4.7% over the past year Loan commitments continue to trend higher, signalling that many buyers are successfully entering the market despite affordability challenges.

While affordability remains a challenge, first home buyers continue to enter the market in significant numbers. Understanding where opportunities exist, what support is available and which purchasing pathway is right for you can make home ownership more achievable than you may think.

How have NSW entry-level homes performed over the past year?

Market

Average Price

Annual Growth

What it means

Sydney Houses

$1.125m

+11%

Competition remains strong for entry-level detached homes

Sydney Apartments

$641,000

+3%

A more accessible pathway for many first home buyers

Regional NSW Houses

$738,000

+7%

Lower entry prices than Sydney with strong lifestyle appeal

Regional NSW Apartments

$591,500

+10%

Continued demand for affordable regional housing

Tracking the average sales price for homes in the the lowest quartile, plus % price change over the year ending Q1/26. Source: McGrath Research, Cotality

Preparing to buy Three steps to get started Before you begin inspecting properties, it's important to build a strong financial foundation.

Save your deposit

Review government support

The dream of home ownership begins with the first dollar saved towards your deposit. Having a clear savings target is important. Review your income, expenses and savings capacity.

Review government support by taking the time to understand the grants, concessions, stamp duty exemptions and shared equity schemes that may be available to first home buyers in your state, as these initiatives can significantly reduce upfront costs, lower the deposit required and help bring forward your purchase timeline.

2 Understanding your borrowing power Work with a lender or mortgage broker to assess your financial position to determine how much you may be able to borrow. They can also check your credit history. Knowing your price range can help you search with confidence and act quickly when the right home becomes available.

Want to learn more about your mortgage options? Whether you're comparing lenders, exploring loan products or keeping an eye on interest rates, the Oxygen Home Loan team can help guide you through the process.

Government support explained What assistance is available? Australia-wide incentives

NSW incentives

First Home Super Save Scheme | FHSSS

First Home Buyers Assistance Scheme | FHBAS

– Eligible buyers can make voluntary super contributions (often at a lower tax rate) then withdraw to help purchase their first home. – Up to $15,000 per financial year and $50,000 in total can count towards the scheme; this can be doubled for a couple. – FHSSS can complement the First Home Guarantee and Help to Buy.

Established or new homes

First Home Guarantee | FHG – Buy your home to live in within the price cap to be entitled to a deposit guarantee covering up to 5% of the property value. – Apply through participating lenders to ensure there is no Lenders Mortgage Insurance (LMI) payable. – There are no limits on your annual income or the places available, making the scheme broadly accessible. Help to Buy Equity Scheme – Buy with a minimum 2% deposit of the property value, with no LMI payable for your home to live in. – You share in the home's equity with the Goverment, which is 40% for a new home and 30% for an established home, until this is repaid over time or when the property sells. – There are eligibility limits on your annual income and only 10,000 places available each year.

– No transfer (stamp) duty for homes valued up to $800,000. – Reduced transfer duty on homes valued between $800,000 and $1 million. Vacant land – No transfer duty on vacant land up to $350,000. – A duty concession for a vacant land up to $450,000. First Home Owner Grant | New Homes New homes | Newly built – Grant of $10,000 is available when the purchase price does not exceed $600,000. New homes | Not yet built – When vacant land is purchased and a building contract is signed with a builder, the total combined cost of land price and construction cost must not exceed $750,000 to be eligible for this $10,000 grant.

Paths to ownership First home buyer scenarios Every buyer's journey is different. The following examples demonstrate how different purchasing pathways and support programs can impact upfront costs and deposit requirements. The cost required to buy your first home varies by property price, eligibility and incentives. Using Oxygen Home Loans calculators, these examples show three potential paths to ownership. Scenario 1

Scenario 2

Scenario 3

Single professional buys an established apartment in Greater Sydney

Couple buys a new house-andland package in Regional NSW

Essential worker buys a new apartment in Greater Sydney

Property Price

$800,000

$600,000

First Home Guarantee

Help to Buy scheme

Deposit Required (5%)

-$40,000

Deposit Required (5%)

-$30,000

Deposit Required (2%)

Stamp Duty

Lenders Mortgage Insurance

Est. Other purchase costs

-$4,000

First Home Owner Grant Est. Upfront cost

$44,000

$600,000

-$12,000

Est. Other purchase costs

-$4,000

Est. Other purchase costs

-$4,000

First Home Owner Grant

+$10,000

First Home Owner Grant

+$10,000

Est. Upfront cost

$24,000

Est. Upfront cost

$6,000

Finding the right property Research before you buy Local market knowledge remains one of the most valuable tools available to first home buyers.

Access to transport

Shops and lifestyle amenities

Schools and childcare

Future infrastructure projects

Walkability

Comparable sales

Local demand

Development plans

Inspection checklist What should you look for? A thorough inspection can reveal potential issues, highlight future expenses, and help ensure the property suits your needs both now and in the years ahead.

Inside the property Doors, windows & locks: Open and close correctly, lock securely and show no signs of damage. Water pressure & plumbing: Check taps, showers, toilets and look for leaks or water damage Walls, ceilings & floors: Look for cracks, stains, mould, uneven flooring or signs of movement. Natural light and ventilation: Assess sunlight, airflow and overall comfort throughout the home. Storage & layout: Consider whether the floorplan suits your current and future needs.

The neighbourhood Transport connectivity: Check proximity to public transport and major road networks. Schools & local services: Consider access to schools, childcare, shops and medical facilities. Noise & traffic: Visit at different times to understand activity and noise patterns. Future developments: Research planned infrastructure or developments in the area. Community & lifestyle: Assess walkability, safety, amenities and overall neighbourhood appeal.

Outside the property Roof, gutters & drainage: Check for visible damage, rust, blockages or drainage issues. External walls & structure: Look for cracks, deterioration or signs of structural movement. Fencing & outdoor areas: Assess the condition of fences, decks, retaining walls and landscaping. Future maintenance: Research planned infrastructure or developments in the area. Parking & access: Consider driveway access, parking availability and ease of entry.

Questions to ask to ask the agent: Why is the owner selling?

Do they have a particular timeline?

How long have they owned?

What price feedback have they received?

Budgeting beyond the deposit What else needs to be considered? Many first home buyers focus on saving a deposit, but it's equally important to budget for the additional costs that come with purchasing a property. Potential upfront costs

Ongoing costs

Conveyancing fees ($1,500 - $3,000) Mortgage registration and transfer fee NSW ($370) Loan establishment fees ($150 - $750) Insurance (Home, contents or landlord insurance) Building inspections ($300 - $1,000) Pest inspections ($300 - $600) Moving expenses ($500 - $2,000)

Council rates Water rates Home and contents insurance Strata levies Repairs and maintenance

Note: Every property purchase is different, and costs can vary significantly depending on your circumstances. We recommend you speak with a qualified lender, broker, solicitor or conveyancer to understand the costs that may apply to your situation.

Understanding buying methods Private treaty/sale or auction Buying by private treaty/sale

Buying at auction

Private treaty is the most common method of buying a home in Australia, where a property is listed for sale at an advertised price or price guide.

An auction is a public sale conducted by a licensed auctioneer, where a property is sold to the highest bidder, subject to the reserve price being met.

Whilst a property may be marketed with an asking price, the eventual sale price is typically established through negotiation. Following a period of offers and counteroffers, the buyer and seller will often agree on a price that reflects market conditions and their respective expectations.

The vendor (seller) will set a reserve price in consultation with their agent. This is the minimum price they are prepared to accept for the property.

Once this price is reached, the Contract of Sale is signed and a deposit of approximately 10% is made. When there is a cooling-off period, the buyer can complete the final legal, building and financial checks. Keep in mind if the buyer pulls out of the contract, they may lose some or all of the deposit, so make sure you discuss all of this with your lawyer or conveyancer before you sign anything.

If bidding reaches the reserve price, the property is considered "on the market" and will be sold to the highest bidder. The successful buyer will be required to sign the contract and pay a deposit, typically 10% of the purchase price, on auction day. Importantly, there is generally no cooling-off period when purchasing a property at auction. As a result, buyers should complete all necessary due diligence before auction day, including finance approval, legal review of the contract, and any building or pest inspections. If bidding does not reach the reserve price, the property may be passed in. In this situation, the agent may commence negotiations with interested buyers, often beginning with the highest bidder, to reach a mutually acceptable sale price. Note: Auction rules, buyer obligations and deposit requirements can vary between states and territories. Buyers should seek independent legal and financial advice and confirm the requirements applicable in their state before bidding at auction.

Before buying: Finance pre-approval secured

Deposit funds available

Budget confirmed

Government support eligibility checked

Comparable sales researched

Recent strata meeting notes reviewed

Contract reviewed by a solicitor or conveyancer

Conditions agreed with vendor prior to auction via your solicitor or conveyancer

Building inspection completed Pest inspection complete

Your journey to home ownership A step-by-step guide Buying by private treaty/sale/auction

1. Save your deposit

2. Understand your borrowing power

3. Review government support

4. Research suburbs in price range

5. Obtain loan pre-approval

6. Inspect properties

7. Make an offer or bid

8. Secure finance approval

9. Complete settlement

10. Collect your keys and move in

Understanding the key terms

Term

Definition

Solicitor or Conveyancer

A legal professional who assists both buyers and sellers with contracts, searches and settlements.

LVR (Loan-to-Value Ratio)

The percentage of a property's value you are borrowing from the lender.

Pre-approval

An indication of how much you may be able to borrow, subject to conditions.

LMI (Lenders Mortgage Insurance)

Insurance that protects the lender if your deposit is less than 20% and if the First Home Guarantee or Help to Buy Equity Scheme isn't being used.

Auction

A public sale where the highest bidder purchases the property if the reserve price is met. No cooling-off period applies.

Unconditional approval

Confirmation from your lender that your home loan has been fully approved and all requirements have been met, allowing you to proceed with confidence.

Cooling-off Period

A short period after exchange where a buyer may withdraw from the purchase (conditions apply).

66W Certificate

Waives your cooling off period and can make your offer stronger and more competitive, may be required when buying prior to auction or in a private treaty sale.

Settlement

The final stage of the purchase when ownership transfers from the seller to the buyer.

Guiding you home Explore the latest property insights and research at: mcgrath.com.au/research Find your local McGrath office or speak with a local agent.

© McGrath Limited 2026 Disclaimer: This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by McGrath Limited for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of McGrath Limited in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of McGrath Limited. McGrath trademarks are property of McGrath Limited.