New figures from a major bank have suggested that tight housing stock is increasingly dictating who gets a foothold on the property ladder.
First home buyers (FHBs) are pointing to a chronic lack of suitable homes for sale as one of the biggest obstacles to entering the housing market, according to new research from Westpac’s latest Home Ownership Report.
The report showed that 26 per cent of FHBs said a lack of properties on the market was preventing them from purchasing, up 14 percentage points since 2019.
Another 26 per cent said they were struggling to find a property that suited their needs, suggesting that both the quantity and type of stock available to new buyers were falling short of expectations.
Yet competition for these scarce homes has also intensified.
Two in five FHBs (39 per cent) nominated rivalry with other purchasers as a barrier, up 8 percentage points over the same period.
Westpac’s CEO of consumer, Carolyn McCann, said the findings confirmed that the supply side of the market had become a defining issue for younger Australians.
“We have a responsibility to the next generation of Australians – housing is a fundamental right,” McCann said.
She said younger cohorts were eager to buy, yet were being increasingly boxed in by the volume and price point of stock coming through the pipeline.
“Young Australians are keen to get into the property market, but the reality is limited supply is creating significant challenges,” she said.
“The most critical focus has to be on supply. We need to build more homes at the right price point so that every Australian feels they have a chance to own their own home.”
Openness to new pathways, but mixed on density
Against that backdrop, many aspiring owners are looking beyond traditional detached housing to expand the pool of options.
More than one-third of FHBs (35 per cent) believe that a greater role for build-to-rent or rent-to-buy models would help make housing more attainable.
Meanwhile, one-quarter (25 per cent) think releasing more land for residential development would further ease the pressure.
Government support also remains a central part of the picture, with uptake of the federal government’s 5 per cent Deposit Scheme increasing.
A majority of FHBs (52 per cent) said they wanted to see further government assistance to address affordability pressures.
McCann said the willingness to consider a wide range of models showed that younger Australians recognised that the current system was not delivering enough stock in the right places.
“Across the country, we’re seeing younger Australians adapt to the realities of the housing market, with many recognising that increased density and alternative housing models are essential to improving affordability,” McCann said.
Yet the numbers pointed to a clear ‘yes in theory, no in my street’ tension.
One-quarter of first home buyers believe more apartments or town houses in established suburbs would help relieve affordability barriers, and 16 per cent support increasing density limits.
However, 52 per cent said they were worried about high-density buildings being developed in their suburb.
Three in five FHBs (61 per cent) fear that an influx of higher-density housing would consequently drive up rents or rates, while 47 per cent were cautious that it could fuel rapid population growth.
Balancing suburb character and ‘nation-building’
McCann said the research captured a genuine dilemma of people desiring more opportunities to buy, yet wanting the local characters of their communities preserved.
“Australians care deeply about the character of their suburbs, but the reality is unless we increase supply, younger generations will continue to be locked out of home ownership,” she said.
“This is a national challenge that requires balance, protecting what people value while creating the homes we desperately need.”
She framed the housing shortfall as a chance to reshape the economy and labour market if governments and industry moved decisively to accelerate projects.
“This isn’t just about housing, it’s about nation-building. 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,” McCann added.
[Related: Grants for first home buyers driving up prices and debt]
