Surging property prices make buying a first home a daunting prospect. Australian Bureau of Statistics data shows the price of the average home in Australia is now $571,500.

Sydney boasts the most expensive property market with the median price at $843,994, Real Estate Institute of Australia statistics reveals. At the other end of the scale, Hobart has the lowest median house price at $360,000.

Despite this, it’s heartening to know there are more first home buyers entering the market. Loans for first home buyers rose to 13.7 per cent in February 2015 from 13.6 per cent in January 2015, ABS figures show.

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So what do first home buyers need to know to get a foothold in Australia’s property market?

Firstly, a fat deposit is key. Aim to save 20 per cent of the purchase price for your deposit and you’ll pave the way to lower mortgage repayments.

What’s more, you’ll need to save cash to pay for pricey taxes such as stamp duty. Stamp duty calculators can be found at the Australian Securities and Investments Commission’s Moneysmart website.

When budgeting for your first home, create a buffer for yourself by allowing for unforeseen costs. This may include interest rate rises and emergency house repairs.

On the upside, there are ways to substantially boost your first home savings.

Each state and territory has its own first home owner grant. So depending on where you live, you may be eligible for government assistance.

Those who purchase new homes may be entitled to a grant of:

• $15,000 in New South Wales and Queensland,
• $15,000 in South Australia,
• $12,500 in the Australian Capital Territory,
• $10,000 in Victoria and Western Australia
• $20,000 in Tasmania and
• $26,000 in the Northern Territory

Each state has its own eligibility conditions, including capped purchase prices and property locations.

Finding the right loan is essential for first home buyers. Savvy buyers who research the lending market will be sure to find competitive rates.

ME’s standard home loan rate is consistently lower than those of the big four banks. First home buyers can choose between fixed, variable or split loan options and there are no application or ongoing account-keeping fees.

Check out ME’s home loan rates here.

This content was sponsored by ME Bank. Comparison Rate based on a loan of $150,000 for a term of 25 years. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Terms, conditions, fees and charges apply. Applications are subject to credit approval. For more information, go to mebank.com.au or click the logo below: