How Victorian first-home buyers are skipping mortgages

A vast gap between Victorian first-home buyer loans and first-home buyer tax cuts comes with a range of explanations, but one stands out: they’re paying cash.

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Victorian first-home buyers are skipping the mortgage and getting their foot on the property ladder with cash purchases in surprising numbers.

But even if they’re not struggling with a home loan, often thanks to generous parents including some based overseas, they’re still claiming tens of thousands of dollars in stamp duty discounts.

Figures from the Australian Bureau of Statistics and the Victorian State Revenue Office have revealed that in the 2025 financial year there were 42,208 concessions issued for first-home buyers — but only 38,645 first-home buyer loans recorded with the ABS.

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It works out to 3563 more concessions than first-home buyer loans.

In the 2024 financial year there was a 4893 surplus of concessions to loans.

And the trend of thousands more concessions than loans goes all the way back to the 2018 financial year, with an almost 29,000 difference in favour of concessions.

If even a fraction of this is cash purchases, it equates to thousands.

While it is not clear what share would be buying their first home with cash, experts believe it could be surprisingly high with the bank of mum and dad having become increasingly active since 2018.

In addition to saving on their mortgage costs, first-home buyers making their start on the housing ladder with a cash purchase under $750,000 would be making substantive savings on stamp duty.

This Craigieburn four-bedroom home is priced for first-home buyers with a $690,000-$750,000 asking price.

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A Melton residence could be one of the fastest, most affordable ways into the market for young Melburnians. This one is selling for $529,000-$569,000.

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For a $600,000 home, the cap for paying no stamp duty under the state’s first-home concession scheme, the saving is $31,070.

There are just two suburbs in Melbourne, Melton and Melton South, where the median house price is below $600,000.

There are a further 75 areas where the typical house can be bought under $750,000, up to which price first-home buyers pay a sliding-scale amount of stamp duty which increases as they get closer to $750,000.

Prominent buyer’s agent Cate Bakos said she would encounter at least one purchaser a year who had money in the bank from an inheritance, and had also encountered scenarios where wealthy family bought their kids a home.

“It’s quite normal for a young person with parents in China to do that,” Ms Bakos said.

“But it’s also likely there are parents who have sold shares or equity in their home and a line of credit … and many parents would be prepared to fund something and save their kids the headache of a loan.

“I’ve had one whose mother in China paid cash, and I’ve had others who have had a parent funding the purchase. It’s not uncommon.”

In Werribee, this four-bedroom house just fits beneath the cap with a $690,000-$750,000 asking price.

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Melbourne’s CBD apartments are among the most likely homes to be sold for cash in Victoria. This Southbank address is advertised at just $385,000-$420,000.

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Real Estate Institute of Victoria chief executive Toby Balazs said for most first-home buyers getting a start on the property ladder was a hard push.

“And whilst there will be a range of many, many different scenarios for people accessing this scheme, the intent of it is not to provide an incentive to lower the price for someone who can easily afford it on a cash purchase basis,” Mr Balazs said.

Mortgage and Finance Association of Australia chief executive Anja Pannek said it was worth noting the concession figures and ABS lending data would have differing methodologies and measured separate parts of the transaction process, “so some variation between the two is expected”.

“The available evidence points to a more complex picture than simply attributing the difference to one factor,” Ms Pannek said.

“The ABS collection is designed to capture around 95 per cent of housing lending activity, which means some smaller and newer lenders sit outside the reporting population. At the same time, there will be some first home buyers who purchase without a mortgage, including with support from family, and there can also be differences between when a loan is committed and when a property transaction is recorded.”

For $599,000-$639,000, this three-bedroom Melton South home could be in first-home buyer hands with minimal tax costs.

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Pointing to PEXA, the nation’s largest settlements organisation, data Ms Pannek said with Victoria home to one of the lowest-levels of cash purchases in Australia at about 23 per cent, it was likely methodologies accounted for a substantive portion of the gap.

She played down the prospect of cash-led first-home purchases, though conceded family support for first-home buyers was rising.

“It’s clear family support is playing a bigger role in helping Australians buy their first home,” she said.

“But in most cases that support helps someone get into the market, whether through a deposit contribution or a guarantor arrangement, rather than replacing the need for a mortgage.”

In February an MFAA survey found first-home buyers were among the clients of 97 per cent of brokers, also suggesting they need loan support.

However, the PEXA data also shows some Victorian areas are among the most likely to have buyers pay in cash — including Melbourne’s CBD, where in 2024 51.8 per cent of all residential sales were made without a mortgage.

First-Home Buyer Loans Vs First Home Stamp Duty Concessions

Source: ABS, SRO

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