Australians are increasingly adapting their home-buying habits in response to changing market conditions and rising cost-of-living pressures, with a notable shift towards higher-density housing and regional areas over the past five years, according to a recent analysis of Commonwealth Bank (CommBank) purchasing data.
The proportion of owner-occupier purchases involving apartments and units has risen from approximately one in four in the 2020-21 financial year to nearly one in three in 2025-26. This trend is particularly pronounced among first home buyers, where apartments and units accounted for 44 percent of purchases in 2025-26, up from 32 percent five years earlier. Correspondingly, the share of first home buyers purchasing houses fell by 13 percent to 55 percent.
Despite shifts in housing types, the geographic distribution of purchases has seen relatively little change. Inner metropolitan areas accounted for 26 percent of all owner-occupier purchases in both 2020-21 and 2025-26. Outer metropolitan areas saw a slight decline, dropping by 1 percentage point to 46 percent, while regional areas increased marginally by 1 percentage point to 24 percent, with rural purchases remaining stable at 4 percent. First home buyers showed a greater propensity to purchase in regional locations, where the average mortgage was about 17 percent lower than in metropolitan areas—$503,000 versus $608,000.
Home purchase activity varied across different states and territories. The Australian Capital Territory (ACT) experienced a 22 percent increase in total home purchases compared to the previous year, while Tasmania saw a 9 percent rise and New South Wales an 8 percent increase. Queensland and South Australia reported moderate growth at 5 percent and 3 percent respectively. In contrast, Victoria's market was largely flat with a slight decrease of 0.8 percent, and Western Australia and the Northern Territory both recorded declines of 8 percent and 7 percent respectively.
The data also underline increasing housing affordability pressures, with purchase values rising substantially over the past five years: 22 percent in inner metropolitan areas, 39 percent in outer metropolitan zones, and 46 percent in regional areas. This escalation reflects tightening market conditions that buyers face nationwide.
CommBank’s lending data show a 25 percent increase in construction loan applications in the past year, indicating growing interest in building new homes. However, experts from the bank emphasized the need to streamline the process for constructing new dwellings to meet demand. “We need to make it as straightforward as possible to turn that demand into new homes, because ultimately Australia needs a stronger pipeline of housing coming through," said Marcos Meneguzzi, CommBank’s Executive General Manager of Home Buying.
Many first home buyers are also exploring alternative strategies to enter the market. About 56 percent are pooling resources with partners, friends, or family members to increase their purchasing power. Government programs and financial options such as the five percent deposit scheme, Lender Mortgage Insurance, guarantor loans, and co-ownership models like Property Share are providing additional support amid deposit challenges. On average, it now takes nearly six years for a median-income household to save a 20 percent deposit, though the average deposit size among first-time buyers has dropped to roughly 16 percent, with loan-to-value ratios around 84 percent.
One example of these evolving pathways is Matt and Roshen Panecasio, a couple building a three-bedroom house in Stream Hill near Wollongong through a government-backed package. Having saved an $80,000 deposit by making significant lifestyle adjustments, they secured construction and land loans under the five percent deposit scheme to afford an $885,000 home.
As Australians adjust their housing expectations and purchasing strategies, the data suggest a market in transition, balancing affordability challenges with diverse housing options and geographic preferences.