iscover 
The Commonwealth Bank of Australia’s (CBA) lending data shows apartments and units are accounting for a growing share of first home purchases, while more buyers are joining forces with family and friends to overcome affordability barriers.
Government schemes, including the 5 per cent Deposit Scheme, are helping around half of all first home buyers (FHB) enter the market. However, serviceability constraints and rising interest rates are making it harder for some to turn their deposits into a purchase.
With affordability at record lows, others are stepping back altogether. Equifax found FHB loan demand fell 22.1 per cent year on year in September.
Nonetheless, brokers told Broker Daily that prospective buyers were finding alternative routes into home ownership.
Apartments and regional areas gain ground
CBA’s data found apartments and units accounted for 44 per cent of first home purchases in 2025–26, up from 32 per cent five years earlier. The share buying houses fell 13 per cent to 55 per cent.
Regional purchases also increased, rising from 20 per cent to 23 per cent in 2025–26, while the share buying in inner-metro areas remained stable at 24 per cent.
Westpac’s latest Home Ownership Report similarly found 74 per cent of FHBs were prepared to buy somewhere they had not initially considered.
The proportion intending to buy a house fell from 64 per cent in 2021 to 53 per cent, while the shares considering apartments and units rose from 17 per cent to 29 per cent and townhouses from 7 per cent to 19 per cent.
Sinead Grant, mortgage broker at Flint, said younger buyers were increasingly open to apartments, regional areas and interstate investing.
“People need to stop looking down on apartments or regional properties. Your first purchase doesn’t need to be glamorous. It needs to make financial sense,” she said.
Samantha Harvey, senior mobile broker at Aussie, said many Sydney clients initially looked at apartments because of affordability.
“For many, it’s simply what they can afford, and I think getting into the market is more important to them than waiting for the perfect home.
“We definitely saw a shift towards regional areas during COVID, and even quite a few people moving interstate. I’m seeing less of that now though, and I suspect it’s partly because working from home isn’t as flexible as it was a few years ago.”
Buyers find alternative ways in
CBA also found around 56 per cent of aspiring owners were joining financial forces with a partner, friend or family member to enter the market.
With PropTrack data showing it takes a median-income household an average of 5.9 years to save a 20 per cent deposit, government support is also playing a role. Since its expansion in October 2025, more than 102,000 people have bought a home through the 5 per cent Deposit Scheme.
Harvey said some parents were moving beyond traditional support, such as gifting a deposit or acting as guarantor, to buy property jointly with their adult children.
“I’m now seeing more parents looking at actually purchasing property jointly with their adult children.
“And it’s not always about everyone living together either. In some cases, the parents are simply purchasing a share of the property as an investment, while helping their children get into the market sooner.
“I’m also seeing siblings buying together, rather than waiting until they’re in a position to purchase on their own.”
Grant, who bought two properties by the age of 20, said younger Australians needed to consider alternatives to the traditional path to home ownership.
“The traditional idea of saving 20 per cent, buying a house and living in it forever is becoming less relevant.
“There are so many different ways to enter the market now, and I think young Australians need to understand their options before assuming home ownership is completely out of reach.
“I bought my first property at 18 and my second at 20. Neither purchase was about buying my dream home. It was about getting into the market early, building equity and using property as a stepping stone.”
Serviceability becomes the bigger hurdle
The challenges facing FHBs have shifted alongside the market.
Before the four interest rate hikes, the federal budget and falling house prices, lower-priced homes across the country were surging in value.
In the December quarter of 2025, homes priced within the 5 per cent Deposit Scheme caps rose 3.6 per cent, compared with 2.4 per cent growth for properties above the caps, according to Cotality. Across suburban areas, 89 per cent recorded faster growth in properties within the caps than in higher-priced homes.
Brokers told Broker Daily at the time that FHB demand was not the only driver, with investors also targeting lower-priced properties. They warned that rising prices were also increasing stamp duty costs for buyers.
Since then, house prices have fallen for a sixth consecutive month, with values down 5.2 per cent from their March peak. However, brokers said the decline had offered little relief as borrowing capacity came under pressure.
Cotality found the cumulative impact of four interest rate hikes this year had cut borrowing capacity by almost $90,000.
Harvey said serviceability had overtaken saving a deposit as the biggest hurdle for many buyers.
“It used to be saving the deposit, but with all the government schemes and incentives available now to help people purchase with smaller deposits, I think borrowing power has become the biggest hurdle.
“You can have your deposit ready to go, but if the bank won’t lend you enough to actually buy something, you’re still stuck!
“Coming up to 11 years as a broker, borrowing capacity is probably the toughest I’ve seen it.”
She said higher interest rates and serviceability buffers were making purchases increasingly difficult.
Daniel Kaminsky, senior mortgage broker at Loans4Homes, said cost-of-living pressures and concerns about the commitment of buying a first home were also weighing on borrowers.
“Although first home buyers have been able to save up a deposit to catch up on the property prices, they are concerned about the commitment of buying their first home.
“This has changed since the recent May budget announcement, as they fear being locked into the first home buyer guarantee scheme for a longer period of time now.”
[Related: Upgraders drive record average loan size: AFG]
Want to see more stories from trusted news sources?Make Broker Daily a preferred news source on Google.
