After a big slump following the global financial crisis, first home buyers figures are expected to climb in 2012.

AUSTRALIA'S struggling first-home market finally looks set for recovery as buyers regain confidence in the property and financial markets.

Falling house prices in each capital city and in regional areas as well as a cut in lending interest rates are expected to spearhead renewed activity.

A savage slump in first-home loans fuelled by a flood of government incentives during the global financial crisis caused loan numbers to plunge 30 per cent below their long-term average. However, latest research suggests a return in demand is on its way.

According to a housing outlook report, the 60,000 first-time buyers who were "pulled forward" by the GFC incentives have now washed through the market.

"Data for the first six months of 2011 indicates that although first-home buyer loans declined in year-on-year terms, the rate of decline has slowed," the QBE LMI report says.Loans to first-home buyers in the latest June quarter were only 2 per cent below the same quarter the year before.

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