First home buyer participation in Sydney auctions has fallen to its lowest level in years, with new data showing only 12% of properties sold to this group in June, down from 18% a year ago. The decline highlights the ongoing affordability crisis in Australia's largest housing market.
Sharp decline in first home buyer activity
According to auctioneer group Domain, first home buyers accounted for just 12% of successful bids at Sydney auctions in June, the lowest share since records began in 2019. This represents a significant drop from 18% in June 2025 and 22% in June 2024. The data comes as Sydney's median house price hit a record $1.6 million, making it increasingly difficult for young buyers to enter the market.
"First home buyers are being priced out of Sydney auctions," said Domain chief of research Nicola Powell. "With interest rates remaining high and prices continuing to climb, many are either delaying their purchase or looking to more affordable markets."
Rising prices and interest rates squeeze buyers
The Reserve Bank of Australia has held the cash rate at 4.35% since November 2023, keeping mortgage repayments elevated. Combined with Sydney's median house price rising 8% over the past year, the typical first home buyer now needs a deposit of around $320,000, up from $280,000 a year ago.
"The dream of owning a home in Sydney is slipping further away for many first home buyers," said Powell. "Even with government assistance schemes, the gap between incomes and prices is widening."
Outer suburbs and units see some activity
While inner-city auctions have become dominated by investors and upgraders, some first home buyer activity remains in outer suburbs and for apartments. In areas like Campbelltown and Penrith, first home buyers accounted for 18% of auction sales in June, while units in Parramatta saw 22% first home buyer share.
"First home buyers are being forced to compromise on location and property type," said Powell. "Many are opting for apartments or townhouses in areas further from the city centre to get a foothold in the market."
Government schemes provide limited relief
The federal government's First Home Guarantee and Family Home Guarantee schemes have helped some buyers, but uptake remains limited. In the 2024-25 financial year, 35,000 places were available under the First Home Guarantee, but only 28,000 were used. Critics say the schemes are not enough to offset high prices.
"The government schemes are helpful, but they don't address the core issue of supply," said Powell. "We need more housing stock, particularly in the affordable segment, to truly improve accessibility."
Outlook remains challenging
With the RBA not expected to cut rates until late 2026 at the earliest, and population growth continuing to fuel demand, the outlook for first home buyers in Sydney remains bleak. Auction clearance rates have also softened, falling to 62% in June from 68% a year ago, indicating a broader market slowdown.
"The market is becoming increasingly two-tiered: investors and upgraders are active, but first home buyers are being left behind," said Powell. "Unless we see a significant increase in supply or a drop in prices, the trend is likely to continue."
