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Commonwealth Bank reveals property trend getting thousands of first-home buyers into the market: ‘Innovative’

More first-home buyers are turning to government guarantees to get onto the increasingly expensive property ladder, the country’s biggest bank revealed.

Tamika Seeto
·Finance Reporter
Updated ·4-min read
CBA and property
CBA said Aussies were increasing utitilising first home guarantee schemes to get onto the property ladder, with average loans nearing $500,000. (Source: Getty)

Skyrocketing property prices and the high cost of living are putting pressure on first-home buyer hopefuls to “shift” their borrowing strategies, new data from Commonwealth Bank (CBA) has revealed. An increasing number of buyers are turning to government schemes to get onto the ladder, along with strategies like ‘rentvesting’.

The First Home Guarantee allows eligible home buyers to buy a property with a deposit of as little as a 5 per cent. The government guarantees up to 15 per cent of the property so the buyer can avoid paying lenders mortgage insurance (LMI), which can be thousands of dollars.

Trusted Finance founder and director Robbo Roper told Yahoo Finance that home buyers wanting to take advantage of the scheme should get in early. This will help ensure you have a larger range of banks to choose from and can “maximise your borrowing power and your lending experience”.

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“The longer you wait, even though there might be spots left, it might not end up working out for you because you might not get approved with the only banks that are left with spots,” he said.

CBA, Australia’s biggest home loan lender, said its data found the number of first-home buyers using government-funded guarantees had skyrocketed 45 per cent between the 2021 and 2024 financial years.

“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,” CBA executive general manager home buyer Dr Michael Baumann said.

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Despite increased pressures, the bank’s data found 40 per cent of first-home buyers had purchased a property alone rather than teaming up with a partner, friend or family member. That was up from 35 per cent from 2019.

The average first-home buyer home loan was $497,692 in the 2024 financial year, CBA data revealed. Metro first-home buyers had a higher average home loan size of $529,542, reflecting higher property prices, compared to regional-based first-home buyers at $403,203.

The First Home Guarantee helps eligible buyers purchase a property with a 5 per cent deposit and avoid paying LMI. It is open now to 35,000 people per year.

The Regional First Home Buyer Guarantee is targeted to regional buyers and also allows you to purchase with a 5 per cent deposit. It is open to 10,000 people per year.

There’s also the Family Home Guarantee, which is for single parents and guardians and helps them buy with a 2 per cent deposit. It is open to 5,000 people per year.

More than 150,000 Aussies have bought or built their own home over the past four years through the schemes.

On top of the Australia-wide schemes, there are a range of state and territory schemes for first-home buyers including grants and stamp duty exemptions. You can see our state-by-state breakdown here.

With capital city property prices rising, Beaumann said there could be an opportunity for first-home buyers to get onto the ladder by purchasing in regional areas.

“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,” he said.

“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.”

This property strategy is known as ‘rentvesting’, where buyers purchase a property in an area they can afford and then continue to rent where they want to live.

Buyer's agent George Cerchian said rentvesting could allow you to get a foot onto the property ladder and benefit from potential capital growth, but noted there were risks to be aware of.

“You are very much at the mercy of a landlord who may decide to sell the place that you are renting, they may decide to increase the rent or review the rent,” Cherchian told Yahoo Finance.

“You’re also going to forego government grants because you’re not going to get that as an investor and there are tax considerations.”

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