The Market’s Moving—Are You?
If you're a first home buyer wondering whether now is a good time to enter the property market — you're not alone. At Lumière Financial, we've seen a noticeable rise in enquiries from people getting ready to take their first step into homeownership and seeking home loan pre-approval.
And it’s not just a coincidence — market data confirms that now may actually be a great window of opportunity.
Here's what’s happening and why it matters.
Australian Property Prices Just Hit a Record High
According to the latest PropTrack Home Price Index, Australian home prices rose by 0.39% in May 2025, setting a new all-time high (not just a monthly one). It was the fifth consecutive month of price growth, and every capital city recorded gains. Sydney, Melbourne, and Brisbane led the trend, with regional markets also remaining strong.
Research from Cotality (formerly CoreLogic) backs this up, showing a 0.5% increase in national dwelling values in May, with all state capitals in the green.
So, what’s driving the market upward?
Interest Rate Cuts Are Fueling Demand
In May 2025, the Reserve Bank of Australia (RBA) cut the cash rate to 3.85%, its lowest level in two years. This has had an immediate effect:
Banks and lenders began dropping both fixed and variable mortgage rates.
Some smaller lenders are now offering interest rates under 5%.
Lower rates increase borrowing power and reduce repayments, helping first home buyers get more for their money.
These changes have helped many first-time buyers who were previously priced out—or sitting on the fence—feel more confident about entering the market.
Why First Home Buyers Are Stepping In Now
There are several factors making this a strong moment for first home buyers:
1. Increased Borrowing Capacity
Lower interest rates mean lenders are reassessing what buyers can afford to borrow—often increasing the amount you’re eligible for.
2. Rent-Vesting as a Popular Strategy
Many first-time buyers are embracing “rent-vesting,” where you buy an investment property (often in a more affordable area) and continue renting where you want to live. NAB reports a 10% increase in rent-vesting strategies, particularly in NSW and WA.
3. Government Support Is Expanding
The federal government has committed $800 million to the Help to Buy shared equity scheme, which aims to support 40,000 Australians with buying a home. More state-based grants and stamp duty concessions may also apply depending on where you're buying.
Rental Market Pressure Is Another Catalyst
Rental inflation is forecast to hit 10% in 2025, the highest level since the Global Financial Crisis. With low vacancy rates and strong migration pushing rents up, more renters are deciding that buying is actually the more stable—and in some cases, more affordable option long-term.
What This Means For First Home Buyers
If you're a first home buyer considering making a move, the current market offers:
Interest rates forecast to decrease further in the coming months
Strong lender competition
Government schemes to reduce entry costs
Rising property prices (which could mean buying now avoids paying more later)
While no one can perfectly time the market, these conditions are combining to create a unique opportunity for buyers who are prepared and informed.
Download our First Home Buyer guide
Want to find out more information about being a First Home Buyer?
Our First Home Buyer starter guide covers:
How to assess your deposit requirements
How you can get to your desired deposit faster
The key steps in the property purchase journey
Choosing the right loan for you
Read our First Home Buyer Guide by clicking here.
Need Help Navigating Your First Home Purchase?
At Lumière Financial, we specialise in helping first home buyers understand their borrowing capacity, compare lender options, and take advantage of all government incentives available.
Get in touch with us today by clicking here for a free, no-obligation chat about where you stand and what steps to take next.
Disclaimer: This article is general in nature and does not constitute financial advice. Please consult a licensed professional for personalised recommendations.
