Around 26% of first home buyers said a lack of listed properties was one of the most significant hurdles in entering the property market, and the figure had grown by 14 percentage points since 2019, according to the bank's Home Ownership Report on Tuesday.

First home buyers also faced difficulty in finding a home that was suitable for their needs.

Around 35% of first home buyers said more build-to-rent or rent-to-buy properties could help make housing affordable, while one quarter think more land should be freed up to build new housing. 52% of first home buyers were supportive of more government help to alleviate affordability challenges.

Around 52% were concerned about high-density buildings being built in their suburb. Meanwhile, 61% of first home buyers feared that the growth in high-density buildings could lead to increases in rent or rates, while 47% were concerned it would encourage high population growth. 38% were worried it would change the lifestyle or vibe of the suburb.

Westpac recommended harnessing artificial intelligence to streamline, speed up, and give certainty to new housing development approvals, deferring upfront development costs, and moving all state planning systems to a consistent "deemed approval" setting.