A handful of suburbs in NSW have been identified as ideal locations for first home buyers given their strong capital growth potential, booming economy, and idyllic lifestyle.

These include Tamworth, Wagga Wagga, Central Coast, Coffs Harbour, and Sydney’s western and south-west areas of Campbelltown, Liverpool, Bankstown, Penrith, Blacktown, and Badgerys Creek surrounds.

The First Home Buyer Choice, which officially kicked off in January 2023, allows first home buyers the option of paying a smaller annual property tax over a hefty upfront stamp duty. 

Research suggests first home buyers will be better-off for about 13-18 years by opting for a property tax over stamp duty, depending on purchase price.

InvestorKit Founder and Head of Research said while affordability was a key driver for first home buyers looking to get their foot on the property ladder, there are other factors to consider.

“As a first home buyer, you want to look for markets that are affordable, have housing supply shortages which will lead to capital growth, in addition to offering a great lifestyle and infrastructure pipeline, as this combination demonstrates growth potential,” Mr Paliwal said. 

“Many will also want a low-cost and idyllic lifestyle which often comes with being in proximity to the major city or having a coastal backdrop, and those planning to reside in these areas will also expect strong job opportunities. 

“The areas I’ve highlighted tick one or multiple of these characteristics which makes for a strong long-term purchase.”

Here are the five regions tipped for strong growth potential for first-home buyers looking to take advantage of the First Home Buyer Choice.

1. Tamworth

Median home price: $469,000

According to Mr Paliwal, Tamworth’s recent price growth of 18.3% makes it a standout area.

This is a result of an undersupplied pipeline of future builds and low number of houses for sale and for rent.

Home to a large healthcare facility and a University of New England campus, Tamworth still has approximately $3.8 billion worth of infrastructure projects in the pipeline, which will boost housing demand and local jobs.

Property prices are projected to benefit from long term capital growth.

2. Central Coast

Median home price: $900,000

Whether you're looking at Woy Woy or Wyong, first home buyers were typically priced out of the Central Coast market, but Mr Paliwal said it’s now possible given the First Home Buyer Choice.

“While properties in the area are at a slightly higher price point, with median house prices over $900,000, the price caps of the new legislation mean a lot of suburbs in the Central Coast will get you a house with yard space, as opposed to a small apartment in Bondi,” he said.

“If you’re in the fortunate position to have a higher borrowing capacity, buyers will be pleased to know they can score prices below the peak values of 2022 due to recent price declines in the area.”

3. Wagga Wagga

Median home price: $500,000

Wagga Wagga experienced some of the highest price growth in the county at 20.5% in 2022. 

However, property still remains affordable for many, particularly for first home buyers who may look to turn their property into an investment down the track.

“First home buyers are already becoming active in the market due to very low rental supply levels,” Mr Paliwal said. 

“Wagga Wagga has one of the tightest rental markets in the country, sitting at below 0.5% and the Riverina Region is at 1%.

“Investors who can contribute to adding stock to the rental market during this time will see strong returns.”

4. Coffs Harbour

Median home price: $815,000

Coffs Harbour was one of the top-performing markets during the height of the property pandemic boom, and it’s not surprising given its seaside location without the Byron Bay price tags.

“Coffs Harbour provides homeowners a well-priced lifestyle, and in recent years, the local foodie scene has also emerged with great restaurants, cafes, wineries and breweries,” Mr Paliwal said. 

“The NSW Government is also funding improvements to the marina in addition to other projects. 

“Owning in Coffs Harbour also offers good investment potential, should they later decide to rent out their property.”

5. Western and Southwest Sydney

Median Price: varies depending on suburb

The region is home to some of the most affordable suburbs in Sydney including Penrith, Blacktown, Campbelltown, Liverpool, Bankstown, and Badgerys Creek surrounds.

The construction of the Western Sydney Airport is expected to create more than 25,000 jobs over the next 10 years, contributing to the region's long term growth.

“Surrounding this are the waves of business park projects and key transport infrastructure,” Mr Paliwal said. 

“Job creation and a strong local economy, which is forecasted for the next decade, are all key parts of a high-growth residential market. 

“First-home buyers will be pleased to hear there have been some price declines in the market in recent years, giving them an opportunity to buy at below peak pricing, setting them up for long-term growth.”

Property tax option may only serve to induce demand

If you’re considering purchasing your first home and using this incentive, Mr Paliwal says the time to act is now.

“If you’re a first-home buyer, I suggest taking advantage of these government benefits quickly,” he said.

“While it will temporarily solve affordability for buyers, demand-driven incentives like these can make it worse in the long term. 

“It will attract more buyers to the market and push up property prices $250,000-300,000 in the years ahead, and the amount you think you’re saving in stamp duty will need to be factored into this price growth.”


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
Featured Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
5.99% p.a.
5.90% p.a.
Principal & Interest
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
Principal & Interest
Featured Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Image by Cuong Vu Via Unsplash

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