Here’s the great irony: Interest rates are at all-time lows, and even though they’re looking like they might rise this year, they’re still a much better deal than our parents ever got. The rub is that housing affordability is so out of control (especially in the major cities) that getting into the market is still very difficult.

As a result, we’re seeing fewer First Home Buyers (FHBs) taking out home loans. Statistics suggest that over the past decade FHBs have fallen to record lows, which would also suggest on the face of it, that the great Australian dream of home ownership might be over.

But, we Aussies, we’re an ingenious bunch and where’s there’s a will, there’s a way.

Here are four savvy ways to enter the market if you’re buying for the first time.

1. Consider a compromise

Location is important. There’s no doubt about it, but when you can’t afford your dream house in your dream location, make the most of what you can afford. Think about a two-bedroom as opposed to a three bedroom or consider a duplex over a house that’s free standing. Look to adjacent suburbs or those a little further out from your dream neighbourhood – they are often just a little bit more affordable.

While it’s always considered desirable to be in the city centre or close to the inner-city, outer-ring suburbs have some great advantages. They tend to have better planning as opposed to inner city areas that just kind of grow and expand organically – there are usually more park areas, wider streets with bike lanes and off-street parking and more community facilities. Newer outer-ring suburbs are usually characterised by new developments too, which means that there aren’t expensive repairs to be done, and homes and apartments will have lots of mod cons.

Always remember that your first home is not necessarily your forever home. It’s a foothold into the property market if you purchase wisely and a few years down the track when you’ve built up some equity, you can think about your next move and maybe reconsider your original dream location.

2. Become a rent-investor

The declining number of First Home Buyers has had economists and analysts a bit worried, but anecdotal evidence from many brokers and lenders suggests that FHBs are getting a foothold into the market as investors, meaning they don’t fit the traditional FHBs profile. These FHBs rent out the property they purchase and live more cheaply elsewhere – in a share house in a different suburb or at home with Mum and Dad.

Changes to the first-home owner grant scheme and stamp duty concessions since 2011 have actually encouraged this because FHBs have had to find innovative ways to secure deposits. Sometimes this means purchasing in partnership with family or friends who can contribute to the deposit.

But there are other good reasons to consider being a rent-investor. Lenders offer flexible terms on investment loans and the Australian tax regime is currently pretty favourable for property investment too.

It’s a strategy worth considering. But the key to successful investing – especially if you’re doing it in partnership with others – is to buy for the best financial gain, and keep emotion out of the equation. It’s vital to have an agreement that’s stronger than a ‘handshake’ too, no matter how close you are with your buddies and your family. Make sure you consider all eventualities – what if someone needs to get their money out sooner than you originally agreed? What if one partner gets sick or worse, dies? Get legal and financial advice and understand how renting and taking on an investment property impacts your finances and tax obligations.

3. Think outside the city

With city house prices soaring, a lot of people are looking to regional areas, or even inter-state to buy their first home or investment. The capital growth might not be as accelerated, but property can still be a solid, stable investment.

4. Maximise incentives

While First Home Buyer Schemes aren’t as generous as they once were, there are still various grants and stamp duty concessions offered in each state and territory to give first home buyers a leg up. A lot of people don’t realise these still exist.

In New South Wales, the First Home Owner Grant is only available on new homes. The amount is $10,000 and the home must be valued at $750,000 or less.

Stamp duty: New homes valued up to $550,000 and vacant land valued up to $350,000 are exempt, and concessions are available on new homes valued between $550,000 and $650,000, and vacant land valued between $350,000 and $450,000.

Check the relevant government websites or ask your lender.

Despite all the media reports, home ownership isn’t necessarily out of reach. The best thing you can do is research your options and decide what’s best for you. Then, when you’re ready to source a home loan, talk to us.