Why the Aus property market is stacked against first time buyers

Australian first home buyers are trapped in a brutal cycle of rejection, with one in five missing out on at least three properties they could afford. Find out how to get ahead of the game.

First home buyers are repeatedly being outbid for homes they can actually afford, with 20 per cent reporting they had missed out on at least three properties.

And according to Finder, the strong demand compared to supply is a sure sign that the market is stacked against first time buyers.

Finder’s First Home Buyer Report 2025 – based on a survey of 1006 first home buyers in Australia – revealed a whopping 61 per cent had missed out on a property they were seriously considering.

Being outbid by a competing buyer was the most common reason, affecting one in three (33%).

Almost one in four (23%) didn’t get the property they wanted because another buyer made an unconditional offer, agreeing to buy the property without contingencies.

And a further 11 per cent lost their chance because they couldn’t secure pre-approval from their lender in time, while 7 per cent missed out because a competitor offered a shorter settlement period.

A couple discussing their home loan with a mortgage broker. Picture: iStock.

Finder’s report shows almost half (42%) of first-time buyers who secured finance missed out on a property they were seriously considering two or more times, while one in five (20%) had this happen on at least 3 properties

Finder personal finance expert Sarah Megginson said the majority of first home buyers were beaten to properties they wanted.

“Securing a first property can be a very frustrating and exhausting process that drags on for months on end, which is why it’s so disappointing when you’re pipped at the post,” Megginson said.

“When nearly two-thirds of buyers are missing out on properties they’re serious about, it’s a clear sign that the market is stacked against new entrants.

“With only a few houses to choose from at an affordable price, buyers are often competing for the same properties.

“As budgets get stretched, buyers resort to whatever it takes to secure their dream property.”

Personal finance expert at Finder, Sarah Megginson. Picture: Supplied

The research also revealed that 60 per cent of first home buyers wanted to buy now following recent interest rate cuts.

One in four buyers are looking interstate or in a different region, with 65 per cent saying they expect to spend 30 per cent or more of their income to meet mortgage repayments.

Seventy per cent are buying or have bought with less than a 20 per cent deposit meaning they are subject to Lenders Mortgage Insurance (LMI).

Nearly two in three (65%) first home buyers are already, or expect to be, in mortgage stress which is defined as spending 30 per cent or more of gross income on mortgage repayments.

“The Australian housing market is in a league of its own,” the report said.

“Residential property accounts for 64 per cent of household wealth, compared to a global average of less than 50 per cent and when adjusted for population, the value of Australian property is double that of the United States.

“Since the Global Financial Crisis (GFC) in 2008, Australian house prices have consistently outpaced both the United States and the UK.”

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Finder head of consumer research Graham Cooke said the dominant motivator for buying was no longer just the aspiration to own a home, but the fear of missing out (FOMO).

“FOMO, fuelled by rising prices and social pressure, has overtaken traditional financial planning for many buyers,” Cooke said.

Forty-five per cent of buyers who purchased in the past year say they regret their decision, with 14 per cent of those surveyed reporting they had no savings left.

And 26 per cent revealed they paid to much.

“This kind of financial risk-taking reflects not just ambition, but anxiety – the belief that if you don’t buy now, you may never be able to,” Cooke said.

Interestingly, 14 per cent of those surveyed in both NSW and Queensland said they were looking to buy outside of their home state.

To help Australians have a better chance of cracking the property market, Finder is hosting a free, online First Home Buyer Masterclass.

Securing your first home can be tough. iStock

Participants will be guided through how to turbocharge their deposit, get approved for a loan easily and quickly, and get prepared for property ownership.

Megginson said being prepared can make all the difference when the right property does come along.

“That’s why we’re hosting this free masterclass – to help buyers understand the process, avoid common pitfalls, and improve their chances of success,” she said.

“Our expert panel is going to share some of the steps you can take to have a competitive advantage over other buyers and hopefully, be in the category of first home buyers who get to sign a contract and secure their home.”

The masterclass will be held online on August 5 at 12.30pm with spaces now open for enrolments.

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Originally published as Why the Aus property market is stacked against first time buyers