This is why QLD is a better state to buy your first home in than NSW

Rates and Fees verified correct on October 28th, 2016

While QLD might be lacking in some departments, it’s still a better place than NSW to buy your first home


With State of Origin around the corner, we’ve looked at the best state to buy your first home in, and unfortunately for those of us living in New South Wales, Queensland pretty much has it in the bag.

Recent research has shown that Queensland is currently the most affordable first home buyer (FHB) property market on the East coast of Australia. Being described as the most manageable state for first home buyers, if you live in sunny Queensland you’ll only need to save for 3.8 years to reach the 20% minimum deposit required by most lenders, compared to the national average saving time of 4.1 years.

So Queensland scores higher in terms of affordability, but what about other factors?

By scanning FHB activity and housing affordability, as well as the political and social climate of each state, we find out which state takes the title for State of Origin: FHB edition.

FHB Activity (QLD vs NSW)


A recent study from Mortgage Choice this year found that first home buyers in QLD accounted for nearly one in five loans issued by lenders in February 2015. Whereas, first home buyers in NSW accounted for a less than one in every 20 loans issued.

This means NSW has the lowest first home buyer participation rate with first home buyers accounting for just 3.85% of overall loans written in February this year. Whereas, Queensland reported a much higher buyer participation rate of 17.00%.

This huge difference in FHB activity is largely due to differences in property prices and levels of affordability between the two states.

Property Prices & Affordability (QLD vs NSW)


NSW’s low percentage of first home buyer activity is largely attributed to the fact that Sydney hosts Australia’s highest median house price of $760 000.

This is vastly greater compared to Brisbane’s median house price of $452 000.

But this isn’t the only factor that goes into making a state attractive for FHBs, so let’s also take into account the political and state government actions that influence FHB activity in each region.

First Home Owner Grant, Stamp Duty Exemption & Other Incentives


Mortgage Choice research indicates that over 70% of Australian first home buyers that purchased property in the last two years bought an established dwelling. However, both the NSW and QLD governments do not offer grants or stamp duty concessions to first home buyers purchasing an established property.

However, both state governments offer incentives for FHBs purchasing a new dwelling.

The Great Start Grant offered by the Queensland government helps first home buyers finance their new by offering them $15 000 towards buying or building a new house, unit or townhouse (valued less than $750 000).

Similarly, the NSW state government offers the FHOG (New Homes) scheme to assist FHBs in purchasing a new home or build their new home by offering a $15 000 grant.

However, this scheme will reduce to $10 000 that will become effective on the 1st of January 2016.

Housing Affordability


A recent study found that saving for house deposits has become easier in the majority (54 per cent) of Queensland local regions, compared to 2013. In contrast, the time required to save a 20% deposit has increased by 78% for NSW first home buyers since 2013.

The below graph demonstrates that mortgage repayments as a proportion of monthly disposable income are at 36% for Sydney and 22% for Brisbane, indicating that Sydney FHBs are putting 14% more of their household income towards servicing their mortgage.
NSW vs QLD better for first home buyers

Social Considerations (NSW vs QLD)


Queensland has an unemployment rate of 6.6% which exceeds the national unemployment rate of 6.1%. However, the population in the outer regions of Brisbane and more inclined to fall in unemployment sectors due to the seasonality of tourism and the resource sector.

On the other hand, New South Wales has a lower unemployment rate of 5.8% which sits just below the national level.

As a FHB, state unemployment is an important consideration because it may determine the productivity and socio-economic status of the region.

Transport (NSW vs QLD)

In terms of transport affordability, NSW takes the title. A recent study found that NSW households spend an average of $193 per week on transport in NSW, whereas QLD spends $201 per week in Brisbane.

So you might be able to save a penny or two should you decide to settle down in NSW.

The NSW government has big plans for transport development in the years to come. The recent Budget announcement suggested that Mr Abbott is committed to developing the WestConnex motorway, roads around Badgerys Creek airport and finishing the Pacific Highway works by the end of the 2025.

The federal government has allocated $1.5 billion in grant funding and a $2 billion loan for transport projects throughout NSW, including the WestConnex motorway through Sydney's inner west, and $405 million for the NorthConnex project under Pennant Hills Road in NSW.

On the other hand, the QLD state government has invested heavily in transport projects by injecting $8.2 million to improve access to transport links and infrastructure with the Transport Infrastructure Development Scheme (TDIS).

This demonstrates that both NSW and QLD are undergoing significant developments to improve their transportation.

Crime (NSW vs QLD)

According to the Australian Bureau of Statistics (ABS), crime rates in both NSW and QLD are relatively similar, with QLD having slightly higher rates from 2013-2014, as depicted below.

NSW vs QLD better for first home buyers
The number of reported offenders increased from 2012-2013 and 2013-2015 by 9% in Queensland and by 4% in NSW, which indicates that QLD has a rising trend of crime rates.
NSW vs QLD better for first home buyersNSW vs QLD better for first home buyers
Moreover, we can see that the physical assault victimisation rate for QLD has increased markedly in 2012-2013, compared to NSW.

This shows that QLD is subject to higher levels of criminal activity than NSW, which could deter a FHB from settling down in certain regions throughout Queensland.

In the next few years, it is likely that we will see an uplift in the level of first home buyer activity in both states. While low interest rates and rising property prices will attract first home buyers into the property market in both NSW and QLD, this may dampen with the tightening of monetary policy that is predicted in the near future.

In terms of property price, housing affordability and government incentives, QLD thrashes NSW.

However, it’s important to consider that NSW may be favourable in terms of hosting lower unemployment and crime rates with major transportation projects in the pipeline.

Belinda Punshon

Belinda is a journalist here at Specialising in the home loans and property sections, she is passionate about helping Australians improve their financial wellbeing.

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