FIRST-HOME buyers were the big winners in the closing stages of 2025, which indicated that home loan numbers were edging closer to pre-COVID levels.
HIA Senior Economist Tom Devitt said there was a huge boost in loans issued in the back end of the year.
“There were 31,780 loans issued to first home buyers in the final quarter of 2025, up by 6.8 per cent on the previous quarter, and the strongest performance in almost four years,” he said.
The ABS released the Lending Indicators data for the December quarter 2025 today, which provides the latest statistics on housing finance commitments.
“The Australian government’s 5 per cent deposit scheme was expanded at the start of October 2025 and looks to be helping more first home buyers into the market,” added Mr Devitt.
“This is a positive development given the structural disadvantages first home buyers face in obtaining a mortgage and realising the dream of homeownership.
“Over a decade of post-GFC lending restrictions have been aimed at creating an ‘unquestionably strong’ financial sector but have also increasingly squeezed out first home buyers from the market.
“A strong financial sector is key to a well-functioning Australian economy but a regulatory environment that is so restrictive that banks are prevented from taking on fair commercial risks associated with mortgage lending to average households, is not a well-functioning environment.
“Individual macroprudential restrictions have been justified on the basis of improving financial stability, including investor lending benchmarks, caps on interest-only lending, higher serviceability buffers and limits on high debt-to-income lending.
“But the cumulative impact of these restrictions has not been properly assessed or balanced against the needs of aspiring homeowners.
“Mortgage default rates have remained incredibly low in Australia and progressively greater restrictions on lending don’t appear to have improved the situation further.
“As lending restrictions accumulate, there is little reassessment of whether they remain proportionate to the risks they were designed to address, or who ultimately bears their cost.
“Cumulative tightening of housing finance has reduced housing supply responsiveness, worsened equity and impaired efficiency.”
The number of loans issued nationally in the December quarter 2025 to first home buyers increased in most jurisdictions, led by New South Wales (+10.9 per cent) and Western Australia (+9.8 per cent), and followed by the Australian Capital Territory (+7.1 per cent), Queensland (+6.4 per cent), South Australia (+4.8 per cent), Victoria (+3.5 per cent) and the Northern Territory (+3.2 per cent). Tasmania saw the only decline for the quarter, down by 1.7 per cent.
