While owning a home remains beyond reach for millions of Australians, those who manage to crack the market may increasingly be getting in over their heads.

More than a third (37 per cent) end up exceeding their budget, according to Finder’s latest First Home Buyer Report. 

The comparison site’s survey of more than a thousand first-time buyers – 372 of whom had already completed their purchase – found eight per cent paid more than $100,000 over budget and another eight per cent went at least $50,000 over.

Only 20 per cent of those who took part in the research managed to buy for less than what they believed they could afford.

Part of the reason for the blowouts was to do with underquoted property prices, Finder money expert Sarah Megginson says.

“Underquoting is where a property is listed at a price lower than what it’s worth to bait buyers,” she said.

“It’s illegal but it does happen, particularly in the case of auctions, where underquoted prices can attract more buyers and lead to a bidding war.”

Everything being equal, agents are responsible for proving properties are worth their listed price and informing buyers if estimates change.

NSW led the way when it came to buyers exceeding limits, with 41 per cent of respondents doing so. 

Queenslanders were hot on their heels, with 40 per cent overspending.

So did 31 per cent of Victorian buyers who were polled.

Data from property price predictor REALas indicates some NSW and Victorian agents underquote by as much as 20-30 per cent. However Ms Megginson says that’s not the only reason buyers overextend.

“We’re in a market where prices have skyrocketed and wages can’t keep up with that level of growth,” she said.

“Many have been forced to spend more than they hoped. Unfortunately this will have consequences down the track on buyers’ ability to service their loans.”

The average Australian home loan in April was $615,304, according to Australian Bureau of Statistics data.

Meanwhile, credit reporting agency Equifax says mortgage arrears rates have already started trending up, with first-time buyers more than twice as likely than other mortgage holders to be 90 or more days delinquent.

Finder’s research shows those with higher budgets are more inclined to blow initial limits.

More than half of buyers with a budget above a million dollars exceeded it, including 28 per cent who spent more than $100,000 extra.

That’s compared with 37 per cent of those with $500,000-$1,000,000 to spend and 29 per cent who had less than $500,000.