Just to get into the housing market in a regional Australian city, 30-year-old Brianna Lewis faced a series of life-changing decisions.
First, she moved away from her hometown of Newcastle to take on a job at an architectural firm in Launceston in northern Tasmania.
"I had basically given up on the idea of ever owning a home in Newcastle. I'm a single woman on a part-time wage and still studying, so I realised it wasn't going to happen in the next 10 years," Ms Lewis said.
After working in Launceston for 12 months, she became eligible for the Tasmanian government's MyHome 30-year shared equity program, providing 30 per cent of the purchase price and a stake in any property price increase.
She was desperate to get her foot in the door, but even with this program, it was almost impossible.
Rising interest rates had caused extreme caution with lenders.
"When I started looking, I thought my borrowing capacity was around $250,000. But when I finally got my assessment from the bank, they were much more conservative, and dropped that to $190,000," Ms Lewis said.
"Even with government assistance, I was still really strapped for options.
"There were limited properties in the $200,000-$300,000 range."
It meant she had to make another massive decision: go full time at work to increase her borrowing capacity and delay her studies, or keep studying and stay as a renter.
She chose the former.
"It was a trade-off between finishing my masters and becoming an architect, or finishing my loan," Ms Lewis said.
"I decided it was probably going to be better to have a house and be putting my money into that.
"Even if I am paying off the loan in a trickle, I felt it had more long-term benefits.
"Being a single woman and having that security of my own, every woman I spoke to — my mother's generation — said I was doing the right thing."
Last month, she settled on a two-bedroom unit for $320,000 in South Launceston, using the MyHome scheme.
Despite rising interest rates and a cooling property market, Ms Lewis' sole focus remained on getting a home to call her own.
Rate rise not all bad news, economist says
The Reserve Bank increased interest rates by another 0.25 percentage points to 2.85 per cent on Tuesday — the seventh rate rise in a row since the record low of 0.1 per cent in May.
The intent is to curb inflation by reducing consumer spending, at a time of low unemployment and strong jobs growth.
The higher interest rates mean banks will be increasingly cautious about lending, but it also puts a handbrake on house prices.
University of Tasmania senior economics lecturer Maria Yanotti said these two factors created a balancing act for first home buyers.
"What we're seeing is a slowdown in prices, not necessarily a drop, and that will benefit first home buyers because the market is not as hot. There won't be that feeling of missing out and having to rush to make offers, they'll have more time to shop," she said.
"Australian banks will remain cautious about lending.
"You can't really say which of those effects will be stronger."
CoreLogic found that home values fell 1.2 per cent in October, with the negative trend in all capital cities and most regions.
Sydney has seen the steepest quarterly drop, while Brisbane prices are also coming down, but after a period of rapid growth.
Regional home prices are still up 6.6 per cent compared with 12 months earlier, but recent monthly and quarterly falls have matched capital cities.
Dr Yanotti said the cooling housing market should not cause panic for those who took on mortgages in the past few years.
"We won't see negative growth, just slower growth. Prices are still going to go up, just not as fast," she said.
"If you bought in the last two years, and you're not planning to sell any time soon, you're still going to have plenty of equity."
Governments turn to shared equity schemes
Governments have increasingly looked to shared equity schemes — like Tasmania's MyHome program — as an alternative, or complementary, to first home buyer grants.
Western Australia, Victoria and South Australia have similar programs, and NSW is trialling one.
Prime Minister Anthony Albanese has also announced a federal shared equity program Help to Buy, with a cap of 10,000 Australians, and equity contribution of up to 40 per cent.
Dr Yanotti said these programs were preferable to HomeBuilder and other grant schemes — they just needed to be promoted more.
"It's hard to know how it'll work when implemented nationally," she said.
"One of the concerns with the Tasmanian policy was that it didn't have much reach. Maybe people weren't that aware of it, it was capped, it wasn't promoted, it didn't make much of an impact on the market."
