First home buyers rethink location and property type to enter the Australian housing market

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

Fast facts

74%

of first home buyers surveyed, are willing to purchase in an area they hadn't originally considered.

55%

of Australians believe recent negative gearing and CGT changes will benefit aspiring homebuyers.

29%

of those surveyed intend to purchase an apartment or unit, up from 17% in 2021.

41%

of first home buyers would consider rent-vesting to enter 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.

Carolyn McCann, Westpac Chief Executive, Consumer, says many first home buyers are taking a practical approach to home ownership.

"For many first home buyers, home ownership remains an important goal, but the pathway might not be what they originally imagined," Ms 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."

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.

Carolyn McCann says buyers should view home ownership as a long-term journey.

"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," Ms McCann said.

"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."

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.

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Things you should know

Conditions, credit criteria, fees and charges apply. Residential lending is not available for Non-Australian Resident borrowers.

This information is general in nature and has been prepared without taking your personal objectives, circumstances and needs into account. You should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.

Any tax information described is general in nature and it is not tax advice or a guide to tax laws. We recommend you seek independent, professional tax advice applicable to your personal circumstances.

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About the Westpac Home Ownership Report

The research was commissioned by Westpac and conducted by Lonergan Research in accordance with the ISO 20252 standard. Lonergan Research surveyed 2,000 Australians aged 18+ with surveys distributed throughout Australia including both capital city and non-capital city areas. The survey was conducted online amongst members of a permission-based panel, between 15th and 27th May 2026. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.