According to the latest home ownership data released by Westpac, buyers are willing to compromise on their dream locations to beat affordability hurdles, a shift highlighted by regional buyers like 22-year-old Sydneysider Mia Bennett.
Gen Z First-Home Buyers Pivot Toward Regional NSW Markets
Growing up in Sydney’s eastern suburbs, Mia Bennett quickly realized that purchasing a property in her home market or in Newcastle, where she moved to study teaching, was out of reach. According to news.com.au, Ms Bennett bought a four-bedroom heritage house in Scone, located in the Hunter Region of New South Wales less than 300km from Sydney, after deciding the major metropolitan markets were financially inaccessible.
“Being Gen Z, it’s one of those things we’ve just been told over and over again that it’s so unachievable… but I don’t think people should fear,” Ms Bennett told news.com.au. She noted that living regionally has brought a sense of stability and provided a way to bypass the rental market after five years across multiple properties. Built in the 1930s, the four-bedroom Scone property represents a pragmatic approach to entry-level buying, offering both a place to live and future investment potential as a rental.
Westpac Research Reveals Shifting Priorities for Market Entry
Data from Westpac’s latest home ownership report mirrors Ms Bennett’s experience, showing a broader trend of buyers prioritizing market entry over ideal postcodes. A survey conducted in May involving more than 2,000 participants found that 74 per cent of respondents were willing to buy in areas they had not previously considered, according to Westpac chief executive, consumer, Carolyn McCann.
“We’re seeing buyers broaden their search and think more practically about what works for their circumstances today,” Ms McCann said, noting that buyers are increasingly open to considering different suburbs or properties that do not tick every box. Furthermore, the research highlighted that more than half of participants felt recent adjustments to capital gains tax and negative gearing favored first-home buyers, with Gen Z expressing particular optimism.
Pro Tip for First-Time Buyers: Experts and recent market entrants suggest treating a first purchase as a stepping stone rather than a forever home. Exploring regional options or considering alternative property types can significantly lower the barrier to entry when working with a standard 5 per cent deposit.
Rise in High-Density Living and Rentvesting Strategies
Comparing current data with figures from five years ago, Westpac reported an increased willingness among Australians to purchase apartments and units in high-rise buildings. Preference for townhouses and apartments has climbed by 12 per cent since 2021, demonstrating greater flexibility among buyers determined to break into real estate.
Additionally, the survey revealed that 40 per cent of first-home buyers were willing to consider “rentvesting,” continuing to rent where they prefer to live while purchasing an investment property elsewhere. “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.
Did You Know? According to Westpac’s May survey, nearly three-quarters of surveyed buyers are now open to purchasing properties in geographical areas they completely overlooked prior to their property search.
Frequently Asked Questions
Is now a good time for first-time buyers to enter the market?
According to recent market entrants like Ms Bennett, a dipping or challenging market can be an ideal time for first-time buyers to find bargains and enter the property market at a reasonable price, particularly for those with a 5 per cent deposit.
Are first homes expected to be forever homes?
No. Westpac consumer executive Carolyn McCann notes that a first home is increasingly viewed as a stepping stone and a foot in the door rather than a forever home, giving buyers more financial flexibility for the future.
What is rentvesting?
Rentvesting is a strategy where a buyer purchases a property in a more affordable regional or outer-suburban market while continuing to rent and live in their preferred lifestyle location.
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