The traditional goal of owning a home remains important to buyers, but the type of property people are prepared to purchase is changing. New analysis from CommBank suggests affordability pressures are encouraging more owner-occupiers to consider higher-density housing, particularly apartments, rather than abandoning the goal of home ownership altogether. The shift highlights how buyers are adapting their expectations as property prices, borrowing costs and household budgets influence what can realistically be purchased.
CommBank’s analysis of purchasing patterns over the past five years shows a noticeable increase in the proportion of owner-occupiers choosing apartments. In FY2021, apartments accounted for one in four owner-occupier purchases. By FY2026, that figure had increased to one in three. The change suggests apartments are becoming a more significant pathway into home ownership, particularly for purchasers who want to remain within established locations but cannot necessarily stretch their budget to a detached house.
Interestingly, the type of dwelling being purchased has changed more substantially than the location. CommBank found that approximately 26% of owner-occupier purchases occurred in inner metropolitan areas in both FY2021 and FY2026. This indicates buyers have not necessarily responded to affordability constraints by moving further away from major urban centres. Instead, some appear willing to compromise on property type in order to retain access to locations that suit their employment, transport and lifestyle requirements.
CommBank Executive General Manager of Home Buying Marcos Meneguzzi says worsening affordability is prompting buyers to think differently about what home ownership looks like. That adjustment can involve choosing an apartment rather than a house, accepting less land or considering different forms of housing that provide a more manageable entry price. For many purchasers, the priority remains securing a home in an appropriate location, even if the physical characteristics of that property differ from what they may originally have imagined.
The increase in apartment purchases also demonstrates why the idea of a single Australian home ownership dream is becoming less relevant. A detached house on a substantial block remains desirable for many households, but it is no longer the only measure of successful home ownership. Apartments can offer access to established suburbs, employment centres and amenities at a lower purchase price than nearby houses, making them an increasingly practical option for buyers dealing with tighter borrowing limits.
At the same time, another group of buyers is responding to market conditions by building rather than purchasing an established property. CommBank recorded a 25% increase in construction lending applications during the past 12 months. That rise suggests new housing remains attractive where buyers can secure suitable land and make the overall construction budget work. Building can also give purchasers greater control over design, energy efficiency and the configuration of their home.
The state-by-state figures show purchasing activity is not moving uniformly across the country. The ACT recorded the strongest increase in total home purchases during the past financial year, with activity rising 22%. Tasmania followed with a 9% increase, while purchases in New South Wales rose 8%. Queensland recorded growth of 5% and South Australia increased 3%. Victoria moved in the opposite direction, although only marginally, with purchases declining 0.8%.
These differences underline the importance of looking beyond national trends when assessing housing demand. Conditions affecting buyers can vary significantly between states and individual markets. Relative affordability, employment opportunities, population movements, new housing supply and local economic conditions can all influence transaction volumes. A national trend towards apartments therefore does not mean every market or buyer group is moving in precisely the same direction.
For first home buyers in particular, changing expectations can widen the range of realistic opportunities. Someone who initially focuses exclusively on detached houses may find that an apartment provides a better combination of location, price and lifestyle. Conversely, buyers prepared to consider outer areas or new communities may find building offers a different pathway. The important point is that property type, location and budget increasingly need to be considered together rather than independently.
The CommBank figures ultimately suggest home ownership aspirations remain resilient despite affordability challenges. Buyers have not simply stopped purchasing because the traditional detached house has become harder to afford in many locations. Instead, they are adjusting the type of housing they consider and, in some cases, choosing to build.
That flexibility is likely to become increasingly important if affordability remains constrained. The growing apartment share shows buyers are already making practical compromises, while the rise in construction lending demonstrates continued appetite for creating new homes. Home ownership may physically look different from the traditional ideal, but the underlying objective remains firmly in place.
