First Home Buyers Are Changing the Plan, but Fewer Are Reaching the Finish Line

First home buyers are rethinking what a first home actually looks like. New lending data released this month shows more of them choosing apartments over houses, moving further from the city, and buying with a partner or family member to make the numbers work. At the same time, a separate survey shows the proportion of buyers who are first timers has fallen sharply in just three months. Put together, the two sets of figures tell a fuller story. Those who can still get in are becoming more flexible about what they buy, but a shrinking share of buyers overall are first home buyers at all.

Buying smaller and buying further out

According to CommBank lending data published on 16 October, apartments and townhouses made up 44 per cent of first home purchases over the past financial year, up from 32 per cent five years ago. Houses still account for the majority of purchases at 55 per cent, but that share has been sliding. Regional buying is also on the rise, climbing from 20 per cent to 23 per cent of first home purchases, while the inner metro share has held steady at 24 per cent. The appeal is partly about price. The average first home buyer loan in a regional area was $503,000, around 17 per cent lower than the $608,000 metro average.

Buyers are also sharing the load more than they used to. Just over half, 56 per cent, are buying with a partner, friend or family member rather than going it alone, and the average deposit has slipped to roughly 16 per cent of the purchase price, well below the traditional 20 per cent benchmark. CommBank's Alicia Till says buyers are becoming more open minded, pointing to government schemes, lender's mortgage insurance, more flexible treatment of HELP debt (what's owed on a university study loan), guarantor loans where a family member backs part of the loan, and co ownership products as paths that weren't widely used a few years ago. PropTrak data cited in the same report puts the average time for a median income household to save a 20 per cent deposit at 5.9 years, which helps explain why buyers are looking for a shorter or cheaper path in.

Fewer first home buyers are actually getting there

The second piece of the picture is less encouraging. NAB's Q3 2026 Residential Property Survey, released in the past fortnight, found that first home buyers made up just 25.2 per cent of new housing purchases in the September quarter, down from 38.6 per cent in the June quarter, a drop of more than 13 percentage points in three months. Other owner occupiers picked up almost all of that share, rising from 37.8 per cent to 49.8 per cent. The established housing market told a similar story, with the first home buyer share falling from 39 per cent to 34.4 per cent while other owner occupiers continued a third straight quarterly rise.

Cotality's research director Tim Lawless, quoted in coverage of the survey, points to more than just reduced borrowing power. Buyers are also weighing up higher repayments and the possibility that prices have further to fall before they stabilise. Four cash rate rises through 2026 have pushed the cash rate to 4.60 per cent and eaten into how much banks will lend, which fits with why the buyers who remain active are gravitating toward cheaper properties and cheaper locations.

What this means for you

None of this means the door has closed. It means the path in looks different to how it did a few years ago, and the options worth considering have multiplied. An apartment or a regional purchase isn't a consolation prize. It can be a genuinely sound way to get a foot on the ladder while keeping repayments manageable, particularly with a lender who will assess your situation properly rather than applying a one size fits all rule. Government schemes, co ownership arrangements and buying with family all come with their own fine print, and what works for one buyer won't suit another.

When lenders assess what you can borrow, they don't just look at today's repayment. Regulator APRA requires them to apply a buffer of three percentage points on top of the loan's interest rate, to check you could still manage repayments if rates rose further. That buffer hasn't changed through any of the recent rate moves, so understanding how it affects your borrowing power is a useful starting point if you're planning to buy in the next year.

Figures note: property type, location and deposit figures are from CommBank lending data and PropTrak, published in CommBank's "First home buyers turn to apartments and regional hubs as property dream evolves" article on 16 October 2026. First home buyer share of new and established housing purchases is from NAB's Q3 2026 Residential Property Survey, reported by The Adviser on 20 October 2026. The cash rate and serviceability buffer figures reflect the RBA's 29 September 2026 decision and APRA's current macroprudential settings.

This article is general information only and does not take into account your personal objectives, financial situation or needs. Please speak with a Claremont Financial broker before making any borrowing decision.