First-home buyers who can look at a lower rung of the ladder than they'd ideally desire have a better chance of making it over the threshold. That can mean a cheaper suburb or a flat rather than a stand-alone home.

Remax agent Jerry Chen's patch in Flat Bush straddles some quite good school zones, such as Baverstock Oaks and Ormiston Schools. He finds some first-home buyers who haven't started families are looking for school zones, but often can't afford to live there.

"Some young couples don't have children yet and don't need to worry about the school zone. They should want it in the next house. I recommend to them to look for a house that's comfortable to live in. Trust me, five years later they will have the capital gain and ability to buy [a further rung up]."

Paul Foster, senior sales partner at Iron Bridge Real Estate, also sees first-home buyers who benefit from tempering their expectations. They may want a stand-alone home, but with a little coaxing will consider a unit or something similar.

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"They say: 'Oh no, I wouldn't live in a sausage block'," says Foster. Once shown nice back units, in particular, with private back yards [buyers] do often change their minds.

"I had a buyer who was looking at a very modern two-storey townhouse in a complex in Browns Bay [with] on-site swimming pool and modern features. But they were compromising on area, because they preferred to be closer in and also closer to their daughter's school in Campbells Bay.

"We took them to a unit in Campbells Bay that was attached to the neighbour with a common wall, dated interior in need of work and a separate garage.

Weighing it all up, it made more sense to be in Campbells Bay. They still had the space, and there was plenty of room to add value and make it their own."

Mortgage broker Simon Ward of Lifetime Personal Financial Design says when he sits first-home buyers down, asks them their price bracket and deposit and shows them the numbers, clients are sometimes taken aback.

"To be fair, a lot of the first-home buyers I am seeing have a fairly realistic expectation," he says.

Those who haven't, sometimes nearly fall off their seats when they realise what the first home they desire might cost them all up.

"Then they taper it back," he says.

Those wanting to borrow 90 per cent of the purchase price don't always realise it will cost them more, thanks to higher interest rates, low equity premium, and registered valuation report, none of which may be needed with a 20 per cent deposit. If the buyers can dial back their expectations to a unit or at least a smaller house with fewer bedrooms, they can then afford to buy.

Like Chen, Ward points out to clients that after a few years they will have sufficient equity to move into the larger home.