Demand to buy remains strong, but a shortage of suitable homes is making it harder for Australians to enter the property market. According to the Westpac Home Ownership report shows limited housing supply is now one of the most significant barriers to home ownership - alongside affordability. Fewer listings, intense competition and concerns around density are reshaping how home buyers, particularly first home buyers, approach the market as well as highlighting the need for long-term supply solutions.

February 2026 – 2 minute read

What’s in this insight:

• Key findings on housing supply
• Why suitable homes are harder to find
• How buyers are responding
• Community views on density
• What could help unlock supply

When availability becomes the challenge

For many aspiring homeowners, the biggest hurdle is no longer just saving a deposit or securing finance - it’s finding a suitable property.

Westpac’s latest Home Ownership Report data shows a growing number of first home buyers are struggling to find homes that meet their needs, reflecting constrained housing stock and limited choice across many markets. With fewer properties available, buyers are facing crowded inspections, fastmoving sales and tougher trade-offs.

Competition has intensified as a result, with nearly two in five first home buyers saying rivalry with other buyers is making it harder to secure a property.

How buyers are responding

Despite current conditions, many aspiring homeowners are open to new and alternative ways to help boost supply.

More than one third (35%) of first home buyers believe build to rent or rent to buy properties could help make housing more affordable. One quarter (25%) think more land should be released for new housing.

Support for government assistance is also strong. With growing interest in the Federal Government’s 5% Deposit Scheme, more than half (52%) of first home buyers say they support additional government measures to help address affordability challenges.

Balancing density and community concerns

While many recognise that increasing supply is essential, views are mixed on how that supply should be delivered.

One quarter (24%) of first home buyers believe more apartments or townhouses in existing suburbs could help ease affordability pressures, while 16% support increasing density limits. At the same time, more than half (52%) are concerned about high-density developments in their suburb.

Key first home buyer concerns include:

• Higher rents or rates (61%)
• Increased population growth (47%)
• Changes to the lifestyle or character of the suburb (38%)

What could help unlock supply

Westpac has put forward a number of recommendations to help address housing supply constraints and affordability challenges, including:

• Using AI to streamline and provide greater certainty in development approvals
• Deferring upfront development costs
• Moving state planning systems to a consistent ‘deemed approval’ setting