Limited supply is restricting access for property buyers

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:

 

Fast facts

26%

of first home buyers say too few listings are holding them back, up 14 points since 2019

 

26%

struggle to find homes that fit their needs

39%

feel competition is a barrier, up eight points since 2019

 

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.

 

Carolyn McCann, Westpac Chief Executive of Consumer

“We have a responsibility to the next generation of Australians - housing is a fundamental right,” Ms McCann said.

“Young Australians are eager to get into the property market, but limited stock on market is creating significant challenges. We need to build more homes at the right price point so that more Australians feel they have a genuine chance to own their own home.”

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%)

 

Graph on key concerns

Carolyn McCann, Westpac Chief Executive of Consumer

“Australians care deeply about the character of their suburbs, but unless we increase supply, younger generations will continue to be locked out of home ownership,” she said.

“This is a national challenge that requires protecting what people value, while building the homes Australia needs.”

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

 

Carolyn McCann, Westpac Chief Executive of Consumer

“Faster approvals, investment in apprenticeships and targeted support for construction in the right places will create jobs, strengthen communities and give more Australians the chance to own their home,” Ms McCann said.


 

Other guides to help

Buying your first home

The key to a smoother experience is knowing what to expect. We're here to help every step of the way.

Learn more

Support opportunities

With a government-backed grant or scheme you could become a homeowner sooner.

 

Explore your options

Family security guarantee

Another way to make saving a deposit for a home easier. Find out how the guarantee works.

Learn more

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.

Key Fact Sheet for Home Loans


 

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 19 and 29 September 2025. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.