With house prices still on the rise, first home buyers are having to re-assess their priorities. New research has found that lifestyle preferences have taken a back seat to potential for growth.

Affordability tops the list of priorities for new buyers, followed by potential price growth. Things like proximity to work, having nearby shops, and being close to family and friends are becoming less important as purchasers struggle to find properties that tick all of their boxes.

A survey of 1,000 first home buyers carried out by St George Bank shows that over a quarter (26.4%) had to compromise on either price or location in order to secure their purchase.

Ross Miller, General Manager for Retail Banking at St George, says the survey results suggest people see their home purchase as a long-term investment.

“Buying a first home is more than buying a roof over your head. Our home is usually our biggest financial investment and over the last few decades we have seen a sharp increase in the value of the average Australian home,” he says.

“First home buyers are wise to view their purchase as an investment.”

Some experts have predicted that home owners will be in the minority within a few years, with rising house prices leaving over half the population in a position where buying a home is impossible.

The issue of housing affordability is an ongoing debate, with many arguing that negative gearing is putting young buyers at a disadvantage to their wealthier baby boomer competitors.

REA Group Chief Economist Nerida Conisbee says that pressures on pricing may eventually change the economic landscape, but for now many buyers have to choose between buying an apartment close to the city or a house that leaves them with a longer commute.

“For those wanting affordable housing close to the city, apartment living is eventually going to be the only option,” she says.

“If our desire for big homes outweighs a preparedness to change the way we live, then regional areas may come to the fore. With the rollout of the NBN and the changing ways in which we work, cities like Ballarat, Bendigo, Newcastle and Wollongong may be our next residential boom towns.”