Demand from buyers aged 18-25 is rising in new housing estates, where you can buy land now and save to pay the building deposit later.
Teenagers and first-home buyers in their early 20s accounted for one in every eight new housing estate buyers across Victoria in September.
And while the state’s youngest first-home buyers are at their most active level since 2023, experts believe their numbers will surge even higher across the rest of the year in response to greater access to the nation’s First Home Guarantee scheme.
New data from Oliver Hume shows 12.6 per cent of purchases made in new housing estates in the first month of spring were by those aged 18-25.
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It equates to hundreds of purchases, and for September had them outpacing buyers aged 56-plus, and only fractionally behind the 13.6 per cent of all sales that went to those aged 26-32.
Oliver Hume chief economist Matt Bell said the youngest generation of homebuyers’ activity had trended up steadily throughout the year, but that it was the final three months of the year that could see them hit their peak.
“This is before the October 1 change to the First Home Guarantee, and you would expect an increase in the younger portion off of that,” Mr Bell said.
“There will be a cohort of people who will be able to access it that weren’t able to, and they will mostly be young first-home buyers who are further away from being able to save a deposit.”
Oliver Hume chief economist Matt Bell believes the numbers of young first-home buyers will rise even further before the end of 2025.
With most new estates selling untitled land, many of the younger buyers will save to cover the costs of a deposit on a new home build as they wait for their purchased land to settle in as much as 18 months time. Oliver Hume’s data shows more than 65 per cent of blocks sold in the past month are not expected to be titled until 2026.
With some compact blocks of land selling for as little as $300,000 in Melbourne, an initial deposit could be as low as $15,000.
The economist noted that the share of sales to the next age bracket, those aged 26-32, had dropped back in September compared to August — a sign some might have decided to wait and try to access the revised scheme.
Mr Bell added that as a result their numbers would also increase in both age brackets over the next few months.
The First Home Guarantee offers recipients a chance to buy a home with a 5 per cent deposit, with the federal government guaranteeing the loan so that they do not have to rely on expensive Lenders Mortgage Insurance.
As of October 1, limits on the number of places available as well as income caps were removed.
Prime Minister Anthony Albanese’s government brought forward changes to the Home Guarantee scheme that will benefit first-home buyers from this month on. Picture: NewsWire.
In Victoria, the top threshold for purchases under the scheme was also increased to $950,000 in Melbourne and Geelong, or $650,000 for the rest of the state.
However, despite the boost — first-home buyers will be facing competition.
“It is undoubtedly true that they will be facing competition from investors,” Mr Bell said.
Separate figures from Oliver Hume show interstate investor activity has effectively doubled in just over a year.
In June 2024, investors accounted for 8 per cent of the previous 12 months worth of sales in Victoria’s new housing estates.
Today they account for 16 per cent.
The data also shows that interstate investors are now coming from a much more diverse range of areas.
Those based in NSW accounted for 80 per cent of sales to interstate investors in September last year.
Oliver Hume’s latest home purchaser age data, to the end of September 2025.
Today, they cover less than a third. Meanwhile, Queenslanders bought 21.9 per cent, followed by South Australians at 18.8 per cent and those in WA buy about 12.5 per cent of the share of new housing estate homes going to interstate investors.
Mr Bell said the changes were linked to Melbourne’s improving affordability relative to other capitals, and as long as this continued there would be more demand from those residing in what had once been lower-priced states.
“But I don’t expect the current growth will continue in interstate investors,” the economist said.
“I think for Victoria, you will see first-home buyers and owner occupiers come back more than they will in other states.
“So I can’t see it doubling again.”
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