More than 75 per cent of residents were willing to cut their spending back to afford a home, a Cotality survey released on Friday revealed.
Australians were more likely to do so than their Canadian, US and UK peers, for whom the figures sat below 70 per cent.
The percentage was higher for Gen Z Aussies than any other age group.
Levels of discretionary spending, like eating out, owning a car, and even moving from the family home into a sharehouse, have dropped among young adults in recent years.
The number of 26-to-29-year-olds living with their parents climbed from 19.6 per cent in 2012 to 21.9 per cent in 2024, the Household, Income and Labour Dynamics in Australia Survey revealed on Thursday.
Young men were almost 10 per cent more likely to be staying home than women.
But it wasn't just first-time buyers making significant financial sacrifices to climb the ladder.
Millennials - the largest buyer cohort in the world - are readily forgoing small luxuries to afford homes large enough for their families.
Prospective buyers were selling their second car or putting off holidays while their children were young, Capital Buyers Agency owner Claire Corby said.
"For many, it's around delaying things like going away, or reducing things like dinners out," she said.
"People are leaving where they want to live and buying in cheaper markets."
Most Australians would not be persuaded to participate in the housing market until mortgage interest rates hit a 4.9 per cent average, the data revealed.
The average rate for an owner-occupier in August 2026 was 6.3 per cent, meaning the market is likely to stay quiet for some time and allowing bold buyers to swoop in.
"People are being conservative and cautious," Ms Corby said.
"A lot of it is about personality."
Only a quarter of Australians reported they could feel financially comfortable while paying up-front housing costs, and just 26 per cent said they could cover monthly repayments without changing their lifestyle, the Cotality survey showed.
Ms Corby said it was important for buyers to consider what a property needed to do for them within a certain duration and work backwards.
She spoke with clients who were not willing to stretch their mortgage ceiling given the volatility of rates.
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