Will first home buyers return to the market?

From July 1 there will be some new rules for first home buyers across some parts of the country. But which areas provide value?

The NSW government is due to increase taxes on foreign property investors to help first homebuyers. (AAP) Source: AAP

First home buyer activity peaked in 2009 at just over 30 per cent of the owner-occupier market following a Federal Government grant boost designed to stimulate first home buyer activity.

Since then they've fallen to record low levels, and over the past year averaged 13.5 per cent.

Source: Domain Group/ABS

That could change from July 1 after new measures to boost demand are introduced.

First home buyers in New South Wales will be exempt from paying stamp duty for new and existing properties up to $650,000 and partial exemption up to $800,000.

BIS Oxford Economics Managing Director Rob Mellor says that will make a difference in the state.

"They could be saving $25,000 or more in stamp duty."

In Victoria, stamp duty will be abolished for purchases under $600,000 and on a sliding scale up to $750,000.

Nicola Powell Data Scientist at property group Domain says more needs to be done.

"There are other things that need to be addressed to really activate that market. One of the biggest hurdles with home buyers at the moment is saving that lump sum deposit, under the current economic climate that we're in, where wages are so minimal, it's really hard for first home buyers to save that deposit."

From July 1, the First Home Super Saver Scheme will allow savers to put extra money into super then draw it out in a year's time to help with a deposit.

BIS' Rob Mellor says that will help.

"I think is actually a very good scheme. Effectively, depending on what you can save over the next three or four years you could get a $10,000 tax benefit, maybe even $12,000 or $13,000 tax benefit."

If that's still not enough, Domain's Nicola Powell reminds buyers that your first home is not always your forever home.

"It's about re-evaluating what a first home is and actually thinking outside the box, perhaps that's looking at a different type of property or perhaps that's becoming a 'rentvestor', we're seeing this trend grow and grow, particularly in NSW where first home buyers really are forced out of the market and what they are doing is rent where they currently live and they buy in the more affordable market that is more affordable to their price point."

Nicola Powell adds there is still some value in various state markets and has listed the following as the most affordable for entry-level buyers:

Affordable entry-level suburbs Source: Domain Group

Source: Domain Group

Source: Domain Group