First-home buyers can save thousands of dollars and get into the property market sooner by taking advantage of government help programs, but there’s a catch. 

First-home buyers have been doing it tough amid high interest rates, negative real wage growth and record high property prices, according to PropTrack economist Anne Flaherty.

And it’s never been more difficult to scrape together a deposit, she said.  

“With property prices continuing to climb, and a cost-of-living crisis making it more difficult to save a deposit and service a loan, we are likely to see first home buyers increasingly forced to compromise on their ideal locations and property size,” she said.  

However, state and territory governments except for the Northern Territory offer first-home buyers a full exemption from paying stamp duty, also known as transfer duty, that can be worth thousands of dollars.  

First-home buyers can also use the federal government’s First Home Guarantee (FHG) to buy a home with as little as a 5% deposit without paying lenders mortgage insurance. 

These government schemes can be a major boost for first-home buyers, but do come with conditions, including home price caps that have struggled to keep pace with rising home prices in some states.  

First-home buyer government schemes  

The home price caps for stamp duty concessions and FHGs vary greatly across the country: for example, Western Australia has the lowest stamp duty exemption cap set at $430,000, while Sydney has the highest at $800,000. 

What first-home buyers want  

So what do first-home buyers want in a home then?  

It’s no surprise that a free-standing property was the most popular type of home among first-home buyers, according to the REA Group 2023 Property Seeker survey. REA Group is the publisher of realestate.com.au.  

The survey also looked at location characteristics and revealed that the most important location criteria for first-home buyers were proximity to shops, neighbourhood safety and being close to work. 

First-home buyers can save thousands of dollars through stamp duty exemptions and the first home guarantee. Picture: Getty

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It also found that first-home buyers were significantly more likely to value being close to work compared to other buyers.  

PropTrack senior economist Paul Ryan said the purchase price caps on the government schemes limited what and where first-home buyers could buy.  

"These caps mean first-home buyers will need to look in further-flung parts of capital cities, and often at smaller townhouses or apartments to be able to take advantage of the schemes,” he said.  

"But making these concessions may be worthwhile, with the benefits often allowing first-home buyers to get into the market many years sooner than otherwise." 

Capital city suburbs with median values below the stamp duty exemption and FHG caps in April 2024

For first-home buyers, finding houses for sale that are located near amenities and workplaces, and are priced under those government scheme caps, could be a struggle. 

So here’s a shortlist of first-home buyer friendly capital city suburbs that are worth a look. 

Sydney  

First-home buyers in Sydney should look for homes priced $800,000 and under if they want to get the most out of the stamp duty exemption and FHG scheme.  

For first-home buyers looking for a house, one of the closest suburbs to the city with median house prices below the cap is Hebersham. 

The three-bedroom house at 13 Jarvis Place in Hebersham is going to auction with a $650,000 price guide. Picture: realestate.com.au/buy

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Hebersham is about 38km west of Sydney’s CBD and has a median house price of $750,000.  

Real estate agent and sales executive at Ray White Diamantidis Group Meshel Bahnam said first-home buyers were flocking to Hebersham and surrounding areas.  

“We’re seeing a lot more first-home buyers and investors looking in these areas because it’s affordable,” he said.  

“A few years ago, houses in these areas were around the $600,000 mark and now they’re selling for $800,000 or more, depending on the property.”  

“It’s insane how much prices in these areas have grown.” 

Mr Bahnam said first-home buyers had shown interest in the upcoming auction of the three-bedroom house at 13 Jarvis Place in Hebersham, which had a $650,000 price guide.  

First-home buyers who value proximity to the city and its amenities above all else should take a look at Ultimo, which is just 2km from the CBD and has a unit median price at $767,500. 

Liverpool could be a strong compromise option for first-home buyers. It is located 31km southwest of the CBD and is home to the Westfield Liverpool shopping centre.  

The three-bedroom townhouse at 6/156 Moore Street in Liverpool is on the market for $699,000. Picture: realestate.com.au/buy

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While you may not be able to find a house in Liverpool for $800,000 or less, there are numerous townhouses and villas currently on the market priced below the stamp duty cap.  

Melbourne  

In Melbourne, first-home buyers will need to look for homes worth $600,000 and under to capitalise on the stamp duty exemption and FHG scheme.   

First-time buyers looking for houses near the city can take a look in Broadmeadows, which is one of the closest to the CBD – about 16km north – and has a median house price of $555,000. 

Buyers can also find affordable houses and townhouses in Laverton, which is 17km west of the CBD and has a median house price of $585,000.

First-home buyers have shown interest in the two-bedroom townhouse at 3/297 Cumberland Road in Pascoe Vale. Picture: realestate.com.au/buy

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For buyers happy to compromise on space to be closer to the city, there are townhouses and villas on the market for less than the stamp duty cap in Pascoe Vale.  

Jarrod Couch, senior sales executive and auctioneer at Barry Plant – Coburg, said Pascoe Vale was popular with first-home buyers. 

“Pascoe Vale is only about 10km from the CBD and there’s a train line, as well as cafes, bars and other amenities,” he said.  

“You get a bit more land compared to areas closer to the city as well, so you get the best of both worlds.” 

Brisbane  

Brisbane first-home buyers will be on the hunt for homes priced $500,000 and under to lock in the benefits of the stamp duty exemption and FHG scheme.   

The four-bedroom house at 81 David Street in North Booval is for sale for $485,000. Picture: realestate.com.au/buy

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For house hunters, the southwest suburb of North Booval is one of the closest first-home buyer friendly suburb to the city, with a median house price of $460,000. 

Homebuyers who want the inner-city lifestyle have plenty of choice in apartments and units.  

First-home buyers can live as close to the city centre as Spring Hill – just 1km from the CBD – where the unit median price is $460,000.  

Located about 39km north of Brisbane, Morayfield is another first-home buyer friendly suburb, offering the Morayfield shopping centre and other amenities.  

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Morayfield has a median unit price of $430,000, but buyers who want extra space can find numerous townhouses and villas on the market for less than $500,000.  

Adelaide  

For Adelaide, first-home buyers need to find homes priced $650,000 and under to get the most out of the state’s stamp duty exemption. 

However, the FHG scheme is capped at $600,000 in Adelaide, so home buyers may need to look at homes priced at $600,000 and less if they want to use both schemes.  

Located about 9km from Adelaide’s CBD, St Clair is the closest suburb to the city for house buyers, with a median house price of $555,000.  

The three-bedroom house at 67 Williamson Road in Para Hills is under contract but had a price guide of $525,000-$550,000. Picture: realestate.com.au/buy

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Para Hills, which is about 14km southeast of the CBD, also has affordable houses, with a median house price of $600,000.  

Perth  

First-home buyers in Perth will need to seek out homes priced $430,000 and under if they want the full stamp duty exemption and FHG benefits.  

House hunters will have a tough time in Perth, where only five suburbs across greater Perth have median house prices of $430,000 or less.  

The three-bedroom home at 1/14 Charles Street in Midland sold for $390,000 last month. Picture: realestate.com.au/sold

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Midland, which is 16km from Perth’s CBD, just scrapes into this first-home buyer friendly list, with a median house price of $430,000.  

Located about 26km southeast of Perth, Armadale also boasts a median house price of $430,000.  

Hobart  

First-home buyers in Hobart should aim to bag a home priced at $750,000 and under to get the most out of the stamp duty exemption.  

Just like Adelaide, Hobart’s FHG scheme is capped at $600,000, so first-home buyers may have to look at homes priced at $600,000 or less to access both schemes.  

The three-bedroom house at 105 Springfield Avenue in West Moonah has a $485,000 - $515,000 price guide. Picture: realestate.com.au/buy

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First-home buyers who want to live close to the city will get the best bang for their buck in West Moonah, with a median house price of $599,500 and just 5km from the city centre. 

Another option for first-home buyers is Rokeby, which is about 9km from the city centre and has a $585,000 median house price.