Not so long ago, buying a home in your 20s was something of a rite of passage. These days? It’s more of a long game, and feels increasingly out of reach for many.

In 2024, the average first home buyer in Australia was 36 years old, according to UNSW research . That’s a significant shift, and one largely driven by — you guessed it — the ballooning price of property.

With the average home price sitting at nearly $977,000 ( ABS , December 2023), prospective buyers are taking longer to save a deposit or opting for longer-term financial strategies. In many cases, they're exploring alternative pathways to property ownership, including via their superannuation.

So what does the “average” first home buyer look like today? How have their needs, strategies, and demographics evolved — and can initiatives like the First Home Super Saver (FHSS) Scheme help shift the dial?

The new face of the first home buyer

The shift in the average first home buyer age reflects much more than just high property prices. It paints a broader picture of financial pressure, changing life priorities, and new challenges facing younger Australians.

Property prices vs. wage growth

Over the past two decades, property prices have skyrocketed , far outpacing wage growth. According to CoreLogic, national dwelling values have risen by more than 400% since the early 2000s, while incomes have increased at a much slower rate.

This mismatch means that saving a 20% deposit , once seen as the gold standard, now requires much more time and discipline. For example, a 20% deposit on a $977,000 property sits at nearly $200,000. That's hardly chump change.

Delayed financial milestones

Younger generations are reaching traditional life milestones later than their parents. More Australians are:

• Studying for longer
• Travelling before settling down
• Paying off HECS/HELP debts well into their 30s
• Building diverse investment portfolios before considering homeownership

These trends reflect a more flexible, opportunity-driven mindset, but they also push homeownership further down the timeline.

Rise of single buyers and non-traditional households

There’s also been a demographic shift. Increasingly, first home buyers aren’t couples — they’re singles or friends buying together. Shared equity arrangements, co-buying with siblings, and rentvesting have all emerged as strategies to get on the property ladder.

What’s the First Home Super Saver Scheme, and why does it matter?

Faced with these challenges, some buyers are tapping into the First Home Super Saver (FHSS) Scheme as a way to accelerate their deposit savings.

Launched in 2017, the FHSS Scheme allows Australians to make voluntary contributions into their superannuation , then withdraw those contributions (plus deemed earnings) to help buy their first home. So far, over 51,500 Australians have used the scheme, with a total of $819.1 million released — an average of around $15,900 per person ( ATO , 2024).

Let’s break down how it works.

Contribution caps

You can make up to:

• $15,000 per year in voluntary contributions (either concessional or non-concessional)
• $50,000 in total across all years

These contributions are on top of your employer’s Super Guarantee payments and can be structured to optimise tax benefits.

Learn more about FHSS scheme contribution caps here .

Types of contributions

• Concessional (pre-tax): Made through salary sacrifice and taxed at 15% going in
• Non-concessional (after-tax): Made from income you’ve already paid tax on

When you’re ready to buy, you can withdraw:

• 100% of your voluntary non-concessional contributions
• 85% of your voluntary concessional contributions
• Any deemed earnings calculated by the ATO

For most Australians, the withdrawal is taxed at their marginal tax rate minus a 30% offset, which often results in zero or minimal tax owed.

FHSS in action: a hypothetical scenario

Let’s say Emma, a fictional 30-year-old graphic designer, decides to salary sacrifice $10,000 per year into super for three years under the FHSS Scheme. She’s contributing from her pre-tax income, and pays 15% tax on these contributions inside her super fund.

Over three years, she contributes $30,000. With deemed earnings, her FHSS determination totals around $34,000.

When she withdraws the funds to form part of her deposit for a townhouse, her marginal tax rate is 30% — meaning her FHSS withdrawal is taxed at 30%, minus the 30% offset = zero tax owed.

Emma’s strategy gives her a solid boost to her deposit, with tax savings and interest compounding along the way. It’s not a silver bullet, but it helps her cross the threshold into homeownership a bit sooner.

(NOTE: Emma isn’t a real person. This example is for illustration purposes only to demonstrate how the FHSS Scheme might work in a simplified scenario. Estimates are rounded and based on the following assumptions: future dollar terms; no wage growth or inflation considered; $10,000 in annual pre-tax contributions for three years; quarterly contributions; and a FHSS deemed earnings rate of 7.17% p.a. The marginal tax rate at withdrawal is assumed to be 30%, and the 30% FHSS tax offset fully applies. Inputs are as at 06/06/2025 — always check current ATO rules and rates for the most recent information.)

For a real-life look at the FHSS in action, check out Ana’s story of using the scheme to buy her first home.

What’s the catch?

Like most schemes, the FHSS won’t suit everyone. There are a few important caveats to be aware of:

No easy tracking

There’s no dedicated FHSS account inside your super, which means it can be hard to see how much you’ve contributed, what’s eligible, or how much you can withdraw. You’ll need to keep good records and request an ATO determination when you’re ready. Alternatively, you can explore options which streamline FHSS tracking .

Tax timing matters

If your income is likely to increase significantly between now and when you withdraw, the FHSS tax offset may not help as much. For example, if you contribute at a 15% tax rate and withdraw at a 37% rate, the 30% offset won’t fully compensate for the difference.

Admin and deadlines

Once you request a release, you have 12 months to sign a contract for your first home, or 90 days if you sign before requesting release. The ATO may grant an extension, but if you don’t buy, you may need to recontribute your funds or pay extra tax.

Potential strategic advantage: FHSS and income thresholds

One often under-appreciated benefit of the FHSS Scheme is how it affects income-related thresholds. Withdrawals from the FHSS are excluded from several key government calculations, including:

• Medicare levy
• Division 293 income
• Child care subsidy eligibility
• Family tax benefits
• Study and training support loans (e.g. HELP)

This can help keep your taxable income lower in the year you withdraw — particularly useful if you’re managing a HECS/HELP debt. While salary sacrificing for FHSS doesn’t reduce your repayment income under HECS/HELP rules, the returns earned inside super aren’t added to your income either. That means your home deposit savings are growing tax-effectively — and without nudging you into a higher repayment bracket.

So, should you use the FHSS Scheme?

That depends. The FHSS Scheme can be useful for:

• Buyers with secure employment who can consistently salary sacrifice
• High marginal tax rate earners looking for tax-effective saving
• Disciplined savers who want to avoid dipping into their deposit early
• Long-term planners who are confident they’ll buy within a few years

It may be less useful if:

• You have low or variable income, and won’t benefit from the tax offset
• You’re unsure about your homeownership timeline
• You need easy access to your funds (since FHSS withdrawals take 15–20 business days and have rules attached)

The big picture

The average first home buyer in Australia is older, more financially strategic, and more resilient than ever before. But they’re also navigating one of the most difficult property markets in decades.

The FHSS scheme isn’t a silver bullet. But for the right buyer, it may be a smart way to bridge the deposit gap, reduce tax, and make homeownership feel just a little more achievable. And in a landscape where every edge counts, that’s a welcome tool to have in your arsenal.

Happy first home buying!