Recent Census data tells us that less people own their own homes than five years ago. That can at least be partly attributed to rising house prices. In Sydney, house prices are 12 per cent higher than they were a year ago. In Melbourne, house prices are up 13 per cent from last year.

These increases can be daunting for someone looking to buy property for the first time. But there are a number of options if you want to break into the market.

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Location, location, location

One option is to look at buying in areas where you get more for your money. The median house price in last three months in greater Hobart is $385,000 compared to $985,000 in Sydney, and $690,000 in Melbourne. And house prices are on the increase in Hobart, which means Tasmania is an interesting investment location for a first-time home owner.

If you are willing to go even more regional, house prices are more accessible. But you need to be quick, because regional areas are also on the rise. CoreLogic data shows us that most houses in the 50 most populated regional areas have increased in value in the last 12 months.

Inland towns like Albury in NSW, and Ballarat in Victoria have a median house price of just over $300,000. Well-known coastal towns like Noosa and Ballina are over $600,000. Wollongong is one of the most expensive regional areas, with a median house price over $730,000.

Start small

Another option is to start small. And there is nothing wrong with small, especially if it allows you to get into the housing market. Starting with something you can afford means you can build up your assets. You may be able to buy and sell in the future, or you might consider keeping your smaller house as a rental investment.

CoreLogic data tells us that more and more people are buying into smaller dwellings – flats, apartments and semi-detached houses. In Melbourne, nearly 16 per cent of dwellings are flats, units and apartments, and 17 per cent are semi-detached terrace houses. Ten years ago, nearly two-thirds of Sydney lived in separate houses; now, only 55 per cent of dwellings are separate. It looks like we are slowly moving closer together.

Supply and demand

House prices often respond to demand and supply. When you are considering where to buy, look at where houses are being built. Canberra had the biggest growth of houses in the last five years, according to recent Census data, followed by Melbourne, and Darwin. Most of these new dwellings were semi-detached, row or town houses, with the exception of Darwin.

Look for incentives

There are incentives for first home-buyers. NSW has just announced a stamp duty exception on properties less than $650,000, and a stamp duty discount on properties less than $800,000. The NSW government expects this will save first home buyers up to $24,740 (as of 12/7/17).

Each state government offers different incentives for buying your first home. You can view your options here.

Start saving

You might have heard that you need to save for a 20 per cent deposit on your home. But in fact, some lenders will take a 10 percent deposit with some still only taking a 5 per cent deposit in certain situations (note mortgage insurance is usually required for any deposits less than 20 per cent). Look at where you want to buy, and what you can afford. Set your target, and start saving towards your goal. You can set up a high interest savings account, so your money does more for you. It might mean giving up a holiday or two, but when your eye is on the prize, this is usually a doable sacrifice!