Almost four in five first home buyer purchases in NSW were apartments last quarter, according to REA Group's reporting on new InfoTrack data, as Western Sydney and Dubbo absorb a surge of buyer activity while established house markets stall. The same data shows houses falling from 67% of all property purchases in the April quarter to 55% in the September quarter, with strata properties rising to 37% and vacant land to 7.58% of purchases, as affordability pressure and anticipated tax reforms push buyers toward apartments and vacant land. The shift is reshaping where first home buyers look, from established Sydney house markets toward apartment-heavy corridors and regional centres like Dubbo.
NSW First Home Buyers Abandon Houses for Apartments
REA Group's reporting on the Western Sydney and Dubbo buyer surge describes a market where affordability constraints and looming tax reforms are pushing first home buyers toward apartments and away from the detached house segment. InfoTrack's Lee Bailie said established apartment markets in Sydney's west — including Parramatta, Ryde, Hurstville and Wentworth Point — were attracting price-conscious first-time buyers, while Western Sydney suburbs Penrith, Blacktown and Liverpool, alongside a northwest corridor cluster of Ryde, Castle Hill and Rouse Hill, were also seeing strong first home buyer activity. Dubbo's emergence as the top-ranked overall destination for buyers, after jumping into the top ten in late 2025, points to a broader redistribution of demand away from Sydney's traditional entry-level house corridors, with Port Macquarie and Orange also featuring prominently among regional centres.
This is not confined to a single data point. Bailie noted that vacant land has risen for two consecutive quarters, a trend he linked to upcoming tax reforms limiting negative gearing incentives to new home builds, suggesting investors are already adjusting their purchasing decisions ahead of the rule changes.
Buyer Demand Shifts Across NSW
The InfoTrack figures make the house-versus-apartment pivot concrete at a suburb level. Parramatta has held the top spot among first home buyers since the start of the year, with Penrith, Blacktown and Liverpool also ranking in the national top ten — all Western Sydney markets attracting buyers priced out of established house stock. A second cluster along Sydney's northwest corridor, spanning Ryde, Castle Hill and Rouse Hill, is also drawing strong first home buyer interest.
Beyond metropolitan Sydney, Dubbo's position as the overall top-ranked destination, alongside strong showings from Port Macquarie and Orange, underscores that regional NSW is no longer a side story in the property market. Bailie said Dubbo's appeal rests on its affordability relative to Sydney combined with access to the services and employment opportunities of an established regional centre — fundamentals he said matter more as higher interest rates put pressure on household budgets.
"Last quarter, almost four in five properties purchased by first home buyers were apartments, showing just how important more affordable property options have become for those trying to enter the market," InfoTrack's Lee Bailie said, noting that Parramatta, Penrith, Blacktown and Liverpool all featured in the national top ten for first home buyer activity.
Background: Why Buyer Composition and Regional Shifts Matter
Shifts in the mix of houses, apartments and vacant land purchased by first home buyers are a leading indicator of where affordability pressure is reshaping demand before broader price figures catch up. InfoTrack's data shows houses falling from 67% to 55% of all purchases in a single quarter, with strata properties and vacant land both gaining share — a pattern tied to both interest rate pressure and anticipated changes to negative gearing rules for established dwellings. Because median price figures are a trailing measure of completed sales, tracking underlying purchase-type data gives agents and vendors an earlier read on where buyer demand is concentrating, a distinction covered in more detail in Median vs Average Property Price — Which Matters?.
The broader rate environment is a key driver of this divergence. As Bailie noted, affordability fundamentals matter more to buyers "particularly when higher interest rates are putting pressure on household budgets," and the resulting shift in buyer behaviour — from houses to apartments and vacant land, and from Sydney's established suburbs to Western Sydney and regional centres like Dubbo — reflects affordability constraints working through the system in real time. Readers tracking how rate settings flow through to buyer capacity can find further context in this macro and interest rate market analysis.
What This Means for Vendors and Agents
For agents operating in NSW's outer-ring Western Sydney and regional coastal markets, the data points to sustained first home buyer demand for apartments and regional house stock over established Sydney detached houses, a pattern likely to persist while affordability pressure and higher interest rates remain in place. Vendors in Western Sydney apartment corridors and regional centres such as Dubbo, Port Macquarie and Orange may find continued buyer interest, while agents in established Sydney house markets should factor in a smaller pool of first home buyer competition when setting campaign expectations. Agents should also watch how upcoming tax reforms affecting negative gearing on established dwellings influence investor and vacant land activity in the coming quarters.