New Westpac research has confirmed supply shortages are one of the most significant hurdles for Australians trying to enter the property market. Almost one in four (26%) first home buyers said a lack of listed properties is holding them back - a sentiment that's grown by 14 percentage points since 2019.
Westpac's latest Home Ownership Report has also revealed a quarter (26%) of first home buyers are feeling challenged finding a home that's suitable for their needs, underscoring current stock and suitability barriers for buyers.
Competition subsequently remains fierce, with two in five (39%) citing rivalry with other buyers as a barrier - growing by eight percentage points over the same period.
Carolyn McCann, Westpac Chief Executive of Consumer, says increasing supply should be one of our most urgent priorities.
"We have a responsibility to the next generation of Australians - housing is a fundamental right," McCann said.
"Young Australians are eager to get into the property market, but the reality is limited supply is creating significant challenges. 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."
According to the research, aspiring homeowners were more likely to be open to new and alternate ways to help boost supply. More than one third (35%) of first home buyers said more build-to-rent or rent-to-buy properties could help make housing affordable and one quarter (25%) think more land should be freed up for new housing.
With growing interest and uptake in the Federal Government's 5% Deposit Scheme, more than half (52%) of first home buyers are supportive of more government help to alleviate affordability challenges.
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.
While one quarter (24%) of first home buyers think more apartments or townhouses in existing suburbs could help alleviate affordability barriers and 16 per cent are in favour of increasing density limits, more than half (52%) are concerned about high-density buildings being built in their suburb.
Three in five (61%) first home buyers fear growth in high-density buildings could lead to increases in rent or rates, half (47%) are concerned it encourages high population growth and close to two in five (38%) are worried it will change the lifestyle or vibe of the suburb.
"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," McCann said.
"This is a national challenge that requires balance, protecting what people value while creating the homes we desperately need."
Westpac has put forward a number of recommendations to address housing affordability challenges and supply shortages, including harnessing AI to streamline, speed up and give certainty to new housing development approvals, deferring upfront development costs and moving all state planning systems to a consistent "deemed approval" setting.
"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.
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.
