Home ownership remains a key goal for many Australians, but first home buyers are increasingly adjusting their expectations around where and what they buy to make that goal a reality.

According to the latest Westpac Home Ownership Report, nearly three quarters (74%) of the first home buyers surveyed are willing to purchase in a location they hadn't originally considered. At the same time, many are broadening their property preferences beyond standalone houses as they look for practical ways to enter the market.

What's in this insight

• Why first home buyers are broadening their property search
• How property preferences are changing
• What recent policy changes could mean for aspiring homebuyers
• Alternative pathways buyers are considering
• Tips for entering the property market

Location expectations are shifting

Affordability pressures are encouraging many first home buyers to rethink where they buy their first property.

Westpac's latest research found that 74% are willing to purchase in a location they hadn't originally considered. First home buyers are also the least likely cohort (22%) to rule out a property because of location-related concerns, such as proximity to a busy motorway, airport, flight path or waste management facility.

The findings suggest many buyers are prioritising getting into the market over waiting for the perfect suburb or property.

Property preferences are evolving

The trade-offs first home buyers are making extend beyond location.

The proportion intending to buy a house has declined from 64% in 2021 to 53% today. At the same time, interest in apartments and units has increased from 17% to 29%, while intention to purchase a townhouse has risen from 7% to 19%.

The shift reflects how buyers are balancing affordability with lifestyle and location considerations. While houses remain the most popular aspiration, smaller dwelling types are increasingly being considered as a practical pathway into the market.

In May 2026, buyers appear focused on securing a foothold in the market, even if that means choosing a different property type than originally planned.

Policy changes are boosting confidence

Despite affordability challenges, many Australians remain optimistic about their home ownership prospects.

More than half of Australians (55%) surveyed, believe recent changes to negative gearing and capital gains tax (CGT) arrangements will positively impact aspiring homebuyers. Optimism is particularly strong among Gen Z, with 70% expecting the changes to improve opportunities for first home buyers.

The findings suggest many Australians believe the reforms could help improve access to home ownership, particularly for younger generations looking to enter the market.

Alternative pathways remain popular

Many first home buyers are also exploring different ways to achieve home ownership.

Westpac's research found that 41% would consider rent-vesting, where buyers purchase a property in a more affordable location while continuing to rent elsewhere. Westpac's Home Lending team is also seeing continued interest in government support programs, including the 5% Deposit Scheme.

Tips for aspiring first home buyers

For Australians preparing to purchase their first home, understanding priorities and available options can help simplify the journey.

• Know your non-negotiables
  Understanding what matters most, whether it's location, space, commute time or specific deal-breakers, can help you make informed trade-offs.
• Explore different pathways into the market
  Options such as government support schemes, guarantor arrangements and lenders mortgage insurance may help you enter the market sooner
• Speak to a home lending specialist
  Understanding your borrowing power and loan options can help focus your search on properties that align with your budget and goals
• Think long term
  Your first home doesn't need to be your forever home. For some buyers, choosing a different location or property type can be an important stepping stone towards longer-term goals.