Media releases
Postcode trade-off: First home buyers readjust property expectations to enter the market
1 August 2026
- 74% of first home buyers are willing to purchase in an area they hadn't originally considered.
- A growing number of first home buyers are targeting apartments as fewer plan to buy a house.
- 55% of Australians think recent negative gearing and capital gains tax (CGT) changes will benefit aspiring homebuyers.
Australian first home buyers remain hopeful about home ownership but are adapting their property strategies amid persistent challenges, according to the latest Westpac Home Ownership Report.
More than half of Australians (55%) agree the recent changes to negative gearing and CGT will have a positive impact for aspiring homebuyers, with Gen Z (70%) feeling the most optimistic about the policy changes.
However, affordability pressures are prompting first home buyers to be more flexible around where they enter the property market, with three quarters (74%) willing to buy in a location they hadn’t originally considered. They are also the least likely (22%) cohort to rule out a property due to location ‘deal-breakers’, such as proximity to a waste management facility, busy motorway, airport or flight path.
Carolyn McCann, Westpac Chief Executive, Consumer, says many first home buyers are taking a more pragmatic approach to where they purchase their first home.
"For many first home buyers home ownership remains an important goal, but the pathway might not be what they originally imagined,” McCann said.
“Rather than holding out for their ideal suburb or property, many are focusing on finding a location that helps them take that first step into the market.
"We're seeing buyers broaden their search and think more practically about what works for their circumstances today. That might mean considering a different suburb or a home that doesn't tick every box if it helps them get started on their home ownership journey."
TRADE-OFFS EXTEND BEYOND LOCATION
First home buyers are also broadening their expectations around property type, with a growing preference for smaller dwellings among this cohort. Intention to purchase a house (53%) has declined by 11 percentage points since 2021 (64%), whereas intention to purchase apartments and units (29%, up from 17%) and townhouses (19%, up from 7%) have both increased by 12 percentage points.
At the height of the COVID-19 pandemic, 74% of Australians said they would prefer to live in a house rather than an apartment¹, reflecting a period when Australians were spending significantly more time at home. Today, buyers appear focused on finding a pathway into the market that balances affordability and location considerations.
At the same time, many first home buyers remain open to rent-vesting (41%) to enter the property market. Westpac's Home Lending team is also seeing continued interest among first home buyers in government assistance programs, including the 5% Deposit Scheme.
“A first home doesn't need to be a forever home. For many Australians, it's about making a confident first step to create more options for the future,” McCann added.
“Home ownership is a long-term journey, so understanding the opportunities and trade-offs of different pathways into the market can help buyers make informed decisions and stay focused on their longer-term goals."
Top tips for aspiring first home buyers:
- Know your non-negotiables. Understanding what matters most – whether it's space, location, commute time or deal-breakers like being too close to busy motorways – can help you make informed trade-offs and stay focused on your home ownership goals.
- Explore different pathways into the market. Options such as lenders mortgage insurance, government support schemes and guarantor arrangements are other ways to help you enter the market – check out the Westpac First Home Buyer Hub.
- Speak to a home lending specialist. Having a clear picture of your loan options and borrowing power will help you understand which properties you can realistically consider during your search – simply Book a Banker for a chat at a time and location that suits you.
- Consider the bigger picture. A first home doesn't have to be your forever home. For some buyers, choosing a different location or property type can be a stepping stone towards longer-term goals.
About the research
The research was commissioned by Westpac and conducted by Lonergan Research in accordance with the ISO 20252 standard. Lonergan Research surveyed 2,007 Australians aged 18+ between 15 May and 27 May 2026, with results weighted to Australian Bureau of Statistics population estimates.
1 Westpac COVID-19 Financial Impact Report (May 2020)
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