For many first home buyers in Perth, the dream of owning a home can feel like it is slipping further away.

Property prices have moved quickly. Rents are high. Interest rates are putting pressure on borrowing capacity. And every time buyers feel like they are getting close, the market seems to move again.

If that is how you feel, you are not imagining it.

The Perth market has become genuinely difficult for first home buyers. REIWA reported that Perth’s median house sale price reached $890,000 in the March 2026 quarter, while the median unit sale price reached $635,000. Perth’s median weekly house rent also rose to $730, with units reaching $700. 

At the same time, interest rates remain a major part of the affordability equation. The RBA cash rate target increased to 4.35% effective 6 May 2026, which can place further pressure on borrowing capacity and repayments. 

So yes, there’s no denying that for first home buyers, it can feel incredibly hard.

But hard does not always mean impossible.

The path into home ownership may look different for this generation of first home buyers. It may require more planning, more support, and a clearer strategy than it did in the past. But there are still options worth exploring.

1. Guarantor loans: using family support to bridge the deposit gap

One of the biggest challenges for first home buyers is not always the monthly repayment. Often, it is saving the deposit fast enough to keep up with rising property prices.

A guarantor loan can help some buyers get into the market sooner by allowing a family member, usually a parent, to use part of the equity in their own property as additional security for the loan.

In simple terms, this may allow a first home buyer to:

• buy with a smaller cash deposit
• avoid or reduce Lenders Mortgage Insurance
• enter the market sooner
• keep more cash available for settlement costs and emergency buffers
• compete at a higher price point than they could with savings alone

This can be particularly useful in a rising market, where the time it takes to save a larger deposit can become a moving target.

But a guarantor loan is not just a shortcut. It needs to be structured carefully.

The guarantor is taking on risk. If the borrower cannot meet their loan obligations, the guarantor’s property may be exposed. For that reason, it is important that both the buyer and guarantor understand the structure, the exit plan, and how the guarantee may be released in the future.

At Base Home Loans, we would usually want to look at:

• how much guarantee support is actually needed
• whether the buyer can afford the repayments on their own
• how quickly the guarantee may be removed
• whether the guarantor has enough equity and comfort with the risk
• whether other options may be safer or more suitable
• whether legal and financial advice should be obtained

Used well, a guarantor loan can be a stepping stone — not a permanent arrangement.

2. The 5% Deposit Scheme: buying sooner without Lenders Mortgage Insurance

Another option for eligible first home buyers is the Australian Government 5% Deposit Scheme.

The scheme allows eligible first home buyers to purchase with a minimum 5% deposit, while eligible single parents or legal guardians may be able to buy with a minimum 2% deposit. 

Housing Australia provides a guarantee to participating lenders, which can help eligible buyers avoid the cost of Lenders Mortgage Insurance. More than 300,000 Australians have bought or built a home with support from the scheme. 

This can be a powerful option for buyers who have income strong enough to service a loan, but who are struggling to build a full 20% deposit while also paying rent.

However, buyers still need to meet eligibility rules, lender policy, property price caps and serviceability requirements.

The key question is not just:
“Can I buy with 5%?”

It is:
“Can I buy with 5% and still have a comfortable, sustainable plan after settlement?”

3. WA stamp duty changes: reducing upfront costs for eligible buyers

There has also been a recent positive change for WA first home buyers.

On 7 May 2026, the WA Government announced changes to the first home owner rate of duty thresholds. Under the announced changes, no duty is payable for eligible purchases of newly built or established homes valued up to $600,000, with concessional rates applying up to $800,000. For vacant land, the exemption threshold increased to $450,000, with concessional rates up to $550,000. 

This matters because stamp duty can be a major upfront cost.

For some buyers, a reduction in duty may mean more cash available for deposit, settlement costs, moving costs, inspections or emergency savings.

But it is important to understand that a stamp duty concession does not automatically increase borrowing capacity. It may reduce the amount of cash needed to complete the purchase, but lenders will still assess income, expenses, debts, deposit, credit history and repayment affordability.

In other words, it helps — but it is not the whole strategy.

4. Buying with a sibling, partner or friend

Some first home buyers are also exploring co-buying as a way to get into the market.

This might mean purchasing with:

• a partner
• a sibling
• a close friend
• another family member

The advantage is that two incomes and two savings positions may improve borrowing capacity and deposit strength.

The downside is that co-buying requires very clear expectations. Before buying with someone else, it is important to think through:

• who owns what percentage
• what happens if one person wants to sell
• what happens if one person loses income
• how repayments and expenses are split
• whether both parties want the same type of property
• how future partners, children or life changes may affect the arrangement

This is not something to rush into casually. But for the right people, with the right advice and legal agreement, it may be a pathway worth considering.

5. Expanding the suburb search without giving up the goal

Many first home buyers start with a dream suburb in mind.

That is understandable. But in a fast-moving market, the first suburb list may not always match the buyer’s borrowing capacity.

This does not mean giving up. It may mean being more strategic.

Instead of asking:

“Where do I ideally want to live forever?”

Ask:

“Where can I buy a good first property that gets me into the market and gives me options later?”

This might mean considering:

• neighbouring suburbs
• smaller blocks
• villas, townhouses or apartments
• older homes with renovation potential
• suburbs with good transport links
• areas with planned infrastructure
• properties that may work as a stepping stone

Your first home does not have to be your forever home.

For some buyers, the goal is simply to get a stable foothold in the market, build equity over time, and create more options for the next move.

6. Considering units, villas and townhouses

The traditional first home dream is often a freestanding house on a full block.

But for many buyers, units, villas and townhouses may be a more realistic first step.

This is especially relevant in Perth, where house prices have moved significantly and many first home buyers are struggling to bridge the gap between what they can borrow and what detached homes are selling for.

A smaller or lower-maintenance property can still help you:

• stop renting
• start building equity
• learn how home ownership works
• keep repayments more manageable
• remain closer to preferred suburbs
• create a stepping stone to a future upgrade

The right property type depends on your lifestyle, budget and long-term plan.

But it is worth keeping an open mind. Sometimes the property that gets you started is more valuable than waiting indefinitely for the perfect one.

7. Getting offer-ready before you find the property

In a competitive market, being prepared matters.

First home buyers often lose time because they start looking before they understand their numbers. By the time they find a property they like, they are trying to work out borrowing capacity, deposit, lender policy, pre-approval and contract conditions all at once.

That can be stressful — and it can cost opportunities.

Before making offers, first home buyers should ideally understand:

• their maximum borrowing capacity
• their comfortable repayment range
• their deposit and savings position
• their government scheme eligibility
• their likely lender options
• their pre-approval position
• what conditions to include in an offer
• how quickly they can move

This does not guarantee success, but it does help buyers act with more confidence.

In a hot market, preparation is not optional. It is part of the strategy.

8. Reducing debts and improving borrowing capacity

For some buyers, the issue is not just deposit. It is borrowing capacity.

Small debts can sometimes have a surprisingly large impact on how much a lender is willing to approve.

This may include:

• credit card limits
• car loans
• personal loans
• buy-now-pay-later facilities
• HECS/HELP debt
• unused credit limits

Before applying for a home loan, it may be worth reviewing whether any debts can be reduced, closed or restructured.

However, do not make changes blindly. The timing, evidence and lender treatment can matter. It is worth getting advice before moving money, closing facilities or changing financial arrangements.

A borrowing capacity review can help identify what is helping, what is hurting, and what can realistically be improved.

9. Using rent as motivation, not discouragement

High rents can make it harder to save, but they can also clarify the need for a plan.

If you are already paying significant rent each week, it is worth understanding what a mortgage repayment might look like across different purchase prices.

This does not mean a mortgage will automatically be cheaper than renting. Home ownership comes with additional costs, including rates, insurance, maintenance and strata fees where relevant.

But for some buyers, the gap between rent and mortgage repayments may not be as impossible as they assume — especially once they understand deposit options, government schemes and realistic property types.

The first step is not guessing.

The first step is getting the numbers on paper.

10. Building a strategy around the first property, not the perfect property

This generation of first home buyers may need to think differently about the first purchase.

Instead of waiting for the perfect home in the perfect suburb with the perfect deposit, the question may become:

“What is the smartest first step I can take from where I am now?”

That might be a guarantor loan.

It might be the 5% Deposit Scheme.

It might be buying a townhouse instead of a house.

It might be purchasing with a sibling.

It might be reducing debt for six months, then applying.

It might be buying slightly further out.

It might be waiting — but waiting with a clear plan, not vague hope.

The point is that first home buyers still have options. They just need to know which ones apply to their situation.

Next Step for first home buyers

Buying your first home in Perth may feel harder than ever — and for many buyers, it genuinely is.

But home ownership is not completely out of reach for this generation of first home buyers.

The pathway may look different. It may require family support, a lower deposit scheme, a smaller first property, a wider suburb search, or a more strategic approach to borrowing capacity. It may also require getting advice earlier, before the property search becomes emotional and reactive.

At Base Home Loans, we help first home buyers understand their options clearly, including guarantor loans, deposit strategies, lender policy, government schemes and borrowing capacity.

Our goal is not just to help you get approved. It is to help you buy in a way that suits your budget, your lifestyle and your long-term plan.

If buying your first home feels impossible, it may be time to look at the numbers properly.

There may be more options than you think.

Ready to understand your first home buyer options?
Book a mortgage strategy call with Base Home Loans today.

FAQs

Can a guarantor loan help me buy my first home sooner?

A guarantor loan may help some first home buyers purchase sooner by allowing a family member to provide additional security using equity in their own property. This can reduce the cash deposit required and may help avoid Lenders Mortgage Insurance, but it also creates risk for the guarantor and needs to be structured carefully.

Does a guarantor loan increase borrowing capacity?

A guarantor loan can help with the deposit and security side of the application, but it does not automatically solve serviceability. The borrower still needs to show they can afford the repayments under lender policy. In some cases, guarantor support may help a buyer access a higher price point because the lender has additional security, but income and expenses still matter.

What is the 5% Deposit Scheme?

The Australian Government 5% Deposit Scheme allows eligible first home buyers to purchase with a minimum 5% deposit. Eligible single parents or legal guardians may be able to purchase with a minimum 2% deposit. The scheme is administered by Housing Australia and can help eligible buyers avoid Lenders Mortgage Insurance. 

Do WA first home buyers pay stamp duty in 2026?

Eligible first home buyers in WA may pay no duty on newly built or established homes valued up to $600,000, with concessional rates applying up to $800,000. These changes were announced by the WA Government on 7 May 2026 and are subject to implementation requirements. 

Is it still possible to buy a first home in Perth?

Yes, but many buyers need a more strategic approach than they may have needed in the past. Options may include guarantor loans, low deposit schemes, government concessions, buying a smaller property, widening the suburb search, reducing debts, or purchasing with another person.

Disclaimer: The information provided on this blog is for general informational purposes only and does not constitute financial or professional advice. While we strive to provide accurate and up-to-date information, mortgage laws and regulations can change, and individual circumstances may vary. We recommend consulting with a qualified financial advisor or mortgage broker to assess your specific situation and needs. Base Home Loans is not responsible for any actions taken based on the content of this blog. Always conduct your own research and consider seeking professional advice before making financial decisions.