First-home buyers across Australia's outer-metropolitan markets have lost up to A$225,000 in equity in under a year as a sharp housing correction erodes recent purchases. The losses are concentrated in Sydney, Melbourne and south-east Queensland growth corridors, according to property analysts at CoreLogic.

The declines stem from a combination of higher mortgage rates and oversupply in newly developed estates, where buyers paid peak prices in 2025. Many recent purchasers now hold mortgages larger than the market value of their homes, a condition known as negative equity, according to CoreLogic's research director, Tim Lawless.

Mortgage brokers and consumer groups reported rising distress among households who used government first-home guarantee schemes to enter the market with minimal deposits. The Finance Brokers Association of Australia warned that thin equity buffers leave these borrowers highly exposed to further price falls or job losses.

The figures add pressure on the Reserve Bank of Australia and the Albanese government ahead of scheduled policy reviews. Treasurer Jim Chalmers has faced repeated calls from the Housing Industry Association to expand supply-side measures rather than demand incentives that critics say inflated prices.

CoreLogic projected that outer-suburban values could fall a further 3 to 5 per cent before stabilising, deepening the equity squeeze for households who bought at the top of the cycle.