Rentvesting is emerging as a key strategy for first-home buyers looking to enter the property market amid rising affordability pressures.
This approach, where buyers invest in a property in an affordable location while continuing to rent in their preferred area, is becoming an increasingly viable solution for Australians struggling to purchase a home in their desired suburb.
Westpac’s latest Home Ownership Report reveals that more than 54% of first-home buyers are considering rentvesting as their first property purchase.
The report also highlights a 4% increase in Australians planning to invest in property in 2025, indicating a broader shift in homebuyer sentiment towards property investment as a wealth-building tool.
To overcome affordability constraints, 82% of prospective buyers are expanding their property search and considering locations they may not have previously explored, simply to gain a foothold in the market.
Westpac senior economist Matthew Hassan notes that first-home buyers are particularly impacted by affordability challenges and supply shortages.
“First-time buyers are at the pointy end of affordability problems in Australia, making that initial step into homeownership the most difficult,” Hassan explains.
“Rentvesting provides an alternative pathway that enables buyers to manage financial risks while balancing lifestyle preferences.”
Market trends also indicate increasing demand for apartments and units, with a 7% rise in preference for these property types over the past year.
Interest in townhouses has also doubled, reflecting a shift towards more affordable, lower-maintenance investment options.
For lenders and mortgage brokers, these insights highlight the need for flexible home loan solutions, tailored investment lending strategies, and guidance on leveraging rental income to secure financing.
As more Australians turn to rentvesting to achieve property ownership, mortgage providers play a critical role in helping buyers structure their loans effectively to maximise long-term financial outcomes.
