The Window First Home Buyers Have Right Now in Sydney and Melbourne

For most of the past five years, first home buyers in Sydney and Melbourne have been competing against investors, downsizers, and upgraders with equity, all fighting for the same pool of established properties.

That competition has not disappeared. But it has changed. And the change creates a specific window for first home buyers that has not existed in recent memory.

What Has Changed in 2026

Three things have shifted the competitive landscape for first home buyers in Sydney and Melbourne simultaneously.

Investor demand for established property has pulled back. The 2026 federal budget restricted negative gearing on established residential properties purchased after Budget night on 12 May 2026. NSW has the highest investor share of home lending in Australia at 43.4%. With negative gearing no longer applying to new established property purchases, a meaningful cohort of investors who were previously competing directly against first home buyers at auction has stepped back.

Independent property market modelling identifies investor withdrawal from established housing as one of the primary drivers of the price softening forecast for FY2027 in Sydney and Melbourne. That same withdrawal is what creates the opening for owner-occupier first home buyers.

Aeris | Melrose Park NSW | $18K deposit | Secure with $18k and $184 x 100 weeks

Prices are softening in the segments first home buyers target. Sydney house prices are forecast to fall between 3% and 7% over FY2027. Sydney unit prices are forecast to fall between 1% and 3%. For a first home buyer who has been saving for years and watching prices move away from them, this is the first meaningful period in several years where the deposit target is not actively moving in the wrong direction.

Borrowing capacity has tightened for everyone but the schemes help first home buyers specifically. Three rate hikes have reduced borrowing capacity across the board. But the federal First Home Guarantee allows eligible first home buyers to purchase with a 5% deposit without paying lenders mortgage insurance. That scheme is not available to investors or most other buyer types. In a market where everyone else is borrowing less, first home buyers with access to the guarantee maintain a relative advantage.

Why Units Are the First Home Buyer Opportunity Right Now

The price softening is not uniform across property types. Independent forecasting shows Sydney units outperforming houses by 4 percentage points in FY2027. Units are forecast to fall around 1% compared to houses forecast to fall around 5%.

For first home buyers, that difference matters in two directions.

First, units are more accessible within the First Home Guarantee's price caps. The scheme's property price caps in Sydney cover a much larger proportion of the unit market than the house market. First home buyers accessing the guarantee are effectively directed toward units by the structure of the scheme.

Second, units are where the relative performance advantage sits. A first home buyer who buys a unit rather than a house in the current environment is entering the segment with the most favourable near-term price trajectory and the most scheme support.

Autobiography Wickham | Wickham NSW | $10K deposit | Secure with $10k and $715 x 91 weeks

Should You Buy Now or Wait?

This is not a once-in-a-generation opportunity. It is a window created by a specific set of conditions that will not persist indefinitely.

Rate cuts are forecast to begin in Q2 2027. When rates fall, borrowing capacity increases, buyer confidence returns, and competition for well-located properties intensifies. The investor cohort that has stepped back from established housing because of the budget changes will not disappear permanently, they will adapt to the new rules and return, likely focused on new builds.

The window is the period between now and that return of confidence, during which competition for first home buyer-appropriate properties is lower than it has been in several years, prices in the most accessible segments are softening rather than rising, and scheme support is available to reduce the deposit burden.

Buyers who are financially ready and waiting for perfect conditions may find that when perfect conditions arrive, the competition has arrived with them.

Concord Central | Concord West NSW | $10K deposit | Secure with $10k and $371 x 170 weeks

This Winter/Spring is a Good Time for First Home Buyers to Buy in Sydney and Melbourne

For first home buyers who are close but not yet holding a full deposit, Coposit's off the plan deposit structure changes what is achievable within the window.

Eligible off the plan properties can be secured with $10,000 upfront, with the remaining deposit paid through weekly instalments during the construction period, interest-free and fee-free. The property price is locked in at today's level. Settlement occurs when construction is complete, typically 12 to 24 months away.

For a first home buyer who wants to act during the current window but cannot yet assemble the full deposit, that structure allows them to commit now and build toward settlement over the construction period.

For renters who are further from a deposit and want a different kind of pathway entirely, Unrent by Coposit is now live. Under the Unrent by Coposit model, rent accumulates toward a deposit rather than disappearing into a landlord's equity. It is a different entry point to the same destination, ownership, designed specifically for renters who have been locked out of the conventional pathway.

Browse eligible first home buyer listings on the Coposit projects page , download the Coposit app, or contact the Coposit team to understand which projects and scheme combinations suit your situation.