As more first home buyers turn to rentvesting amid tight affordability – realestate.com.au

New search data shows that a small but persistent proportion of first home buyers are considering investment routes to access the housing market, especially in more expensive markets.

For decades, the traditional path to homeownership was relatively simple: save a down payment, buy a house to live in, and trade down gradually. But as pressures on housing affordability have deteriorated to historic lows, the behavior of first-home buyers appears to be adapting.

New analysis of realestate.com.au’s search and research activity suggests a proportion of first home buyers are also signaling investment intentions, in line with rentvesting strategies.

While rentvesting remains a minority strategy and the majority of first-home buyer search activity remains focused on owner-occupiers, the pattern of search behavior closely reflects the ABS home finance data and provides insight into how some first home buyers are navigating market conditions.

Measuring the intention to invest

Using search and research signals on realestate.com.au, first home buyers were identified based on their stated intent when submitting property applications. Within that cohort, we measured how many of them also showed investment intention during the same period. If we can answer the question: what proportion of first home buyers who are active in the market appear to be considering investments?

Over the last twelve months to the end of January 2026, approximately 7% of first home buyers looking in Greater Sydney also indicated an investment intention. The share was lower in Melbourne (3.7%) and higher in regional Queensland (6.4%) and Brisbane (5.9%), likely reflecting affordability pressures and deposit hurdles.

Importantly, the geography reflects the location of the properties being searched; the destination market rather than where the buyers themselves live.

While rent vesting intent is most pronounced in higher-end markets such as Sydney, higher shares in some regional areas and in Adelaide and Perth indicate broader dynamics.

In more expensive capital markets, rentvesting is often a response to affordability constraints, with buyers seeking access to properties while continuing to rent where they live.

In Adelaide and Perth and in regions WA and SA, relatively higher shares of rental investment intention may instead reflect stronger rental yields and return-oriented behavior or investor-style market dynamics, where the behavior may be about opportunity.

How this relates to credit data

Search behavior shows intent, but this doesn’t always translate into real results.

Home finance data from the Australian Bureau of Statistics provides a benchmark showing that nationally around 5.4% of first home buyer loans in the twelve months to December 2025 are classified as investment purpose, with further state breakdowns, while the search and research data on realestate.com.au implies an incredibly similar share of 5.5% which is also indicative of investment intent over the corresponding period.

Aerial view of the established north-eastern suburb of Adelaide with hills and CBD in the distance, looking south along Galway Ave with 6-way roundabout (traffic circle) in the foreground. Broadview, looking towards Collinswood, Walkerville.

---

According to the latest new lending data from ABS, NSW shows the highest share of investor lending for first home buyers, while search and research signals on realestate.com.au can be further pinpointed, showing that Sydney’s search behavior shows the highest share of rental investment (7%) within NSW.

Encouragingly, the ABS first home buyer lending data closely matches the search-based rent vesting intention data. Victoria records lower shares in both data sets and markets that record higher first home buyer loans for investor purposes, and also show higher rental intent shares in search activity. The alignment between behavioral signals and realized credit results strengthens confidence that the search data reflects a real pattern.

Why rent vesting is more common in more expensive markets

At first glance, it may seem counterintuitive that intent to rent is highest in Sydney, the most expensive housing market. Wouldn’t first home buyers focus on cheaper regions?

But in practice, rent vesting is not just about buying where real estate is cheap. It is usually a response to affordability constraints in the location where buyers want to live.

Aerial view of a suburb with solar panels on roofs and a swimming pool surrounded by lush green trees and houses

---

In high-cost cities, barriers to deposits are greater, price-to-income ratios tend to be higher, and purchasing a preferred home can be out of reach.

Rentvesting allows buyers to gain exposure to the real estate market, possibly in a smaller or different location, while continuing to rent in their preferred location.

A minority strategy, but a persistent one

Rentvesting remains a minority project. The vast majority of first home buyers still only indicate owner intent and the ABS lending data confirms this in the final purchase decisions made.

However, the presence of a consistent national cohort of just over 5% and a higher share in more expensive markets indicate that rentvesting is an established secondary strategy.

However, from a structural perspective, this reflects behavioral adjustment rather than a shift in ownership preferences – as affordability constraints increase, flexibility in property rights and purchase intentions increase.

Over the past 12 months, around one in 15 first home buyers looking to enter Australia’s largest and most expensive market have also indicated an investment intention.

Rent vesting does not replace traditional first home ownership, but is increasingly part of the toolkit that buyers can use to cope with affordability pressures or to take advantage of the opportunities that real estate investing can provide.