THE FIRST HOME BUYER MATH NO ONE WANTS TO DO

Every few months, a fresh round of commentary turns up declaring the first home buyer extinct.

It's a tidy headline. It's also not what we're seeing on the ground.

What we are seeing is more interesting, and more useful for anyone actually trying to buy. The entry point hasn't closed. It has shifted. The buyers walking into our office in 2026 are buying differently to the ones who walked in five years ago, and very differently to their parents. Once you sit with the numbers, the reasons become hard to argue with.

Start with the price tag

The median dwelling price across Australia is now sitting just below $1.1 million.

That figure isn't the average inner-city house or the price of something architecturally special. It's the middle of the entire national housing stock. Half of every dwelling in the country, in every suburb, sits above it.

When the centre of the market is a seven-figure number, every conversation about a "starter home" needs to be rewritten from the ground up.

Then sit with the savings math

According to the National Housing Supply and Affordability Council, a household on the median income now needs around eleven years to put together a deposit. Once they're in, repayments on a new mortgage absorb close to half of household income.

Read those two numbers together. A decade of saving to earn the right to spend half your income servicing the loan.

That isn't a market problem you fix with a bit more discipline. It's a structural shift in what entry-level ownership costs, in time and in cash flow.

Rates are not helping

The cash rate is expected to move to 4.35% next month. For a buyer with a $600,000 loan, the difference between today's rates and the pandemic-era settings is several hundred dollars a week. Every basis point either expands or contracts the pool of homes a first home buyer can actually afford to settle on.

This is why borrowing capacity, not the asking price, is the number we ask buyers to track most closely. Asking prices are loud. Borrowing capacity is the quiet ceiling that decides what's truly available.

The "they're still buying" argument deserves a closer read

Recent data is being used in two different ways, depending on who is talking.

The headline reading is that first home buyer activity is holding up. Owner-occupier first home buyer loans are running at roughly 120,000 a year, up about 2% on the previous twelve months. The 5% deposit scheme has helped that number along.

The closer reading is less reassuring. The average first home buyer loan size is now pushing $600,000, and growing at 7 to 12% a year depending on whether the buyer is moving in or renting it out. First-time buyers purchasing as investors have actually fallen by around 18% over the past year, to roughly 6,750 transactions.

In other words, fewer people are buying their first property as a wealth-building exercise, the ones still buying are borrowing more to do it, and the support is coming from policy rather than from the market improving on its own.

A working market and a market on policy life support look similar from a distance. They're not the same thing.

Supply is doing some of the work, just not enough of it

Australia delivered roughly 190,000 dwellings last year.

The number sounds healthy until you weigh it against years of underbuilding, planning bottlenecks and a development pipeline that has consistently produced what was easiest to finance rather than what first home buyers can afford. Volume isn't the only test of a supply response. Mix matters. Location matters. Price point matters. On all three, we are still catching up.

The generational scoreboard

At ages 25 to 39, the home ownership rates by generation read like this. Around 45% of Millennials own their home. For Gen X at the same age, it was around 60%. For Boomers, closer to 68%.

That isn't a story about effort. It's a story about what each generation walked into. The arithmetic has changed, and pretending it hasn't isn't fair to the people trying to make it work today.

What we're seeing in Brisbane

Brisbane sits inside the national story but writes its own version of it.

In our patch, the first home buyers getting across the line in 2026 share a few habits. They start the conversation earlier, often a year or more before they buy. They lean on family guarantees more than family deposits. They prioritise location and liveability over land size. They take apartments seriously as a long-term home rather than a stepping stone. They make peace with two bedrooms when their parents would have insisted on three.

None of that is settling. It's a clear-eyed response to the numbers above.

What this means for buyers and sellers

If you're buying your first home, the work is no longer "save the deposit, then look at houses." It's running borrowing capacity, deposit pathway and suburb shortlist as one connected piece, well before you start opening for inspections. The buyers who get this right are the ones who treat the planning phase as part of the purchase, not a precursor to it.

If you're selling at the entry-level end of the market, the buyer in front of you is more financially aware and more constrained than the one you would have met two years ago. They've done the math. The price they can stretch to is decided by their lender long before it's decided by their feelings about your home.

The first home buyer hasn't disappeared. The version of them that bought five or ten years ago has. What's replaced them is a more cautious, better-informed and more financially boxed-in buyer. Helping them across the line is a different job to the one this industry was doing a decade ago, and at Ethel + Florence we think that's worth being honest about.

Data points referenced from the National Housing Supply and Affordability Council, and the ABS.