Soaring house prices are forcing first time buyers to become property investors before they become purchasers of their own homes.
And one researcher says that within a year, first time buyers in Sydney will be more likely to purchase an investment property rather than their own home.
Digital Finance Analytics principal Martin North says first time buyers in Sydney can't afford to buy a place where they want to live but still want to enter the property market.
"People want to get into the property market, they can't get in through the normal route so they are going the other way," he said at the release of JP Morgan's Australian Mortgage Industry report on Wednesday.
"Quite often they will be borrowing money from parents to do that and either living in rental accommodation or living with their parents."
He said banks were also sometimes more willing to lend to investors because repayments could be supported by rental income.
Australian Bureau of Statistics figures show around 7,600 buyers bought their first home in April, but Mr North estimates another 4,000 first time buyers bought investment properties in the month.
His comments came as Treasurer Joe Hockey was criticised for advising first time buyers trying to get on the property ladder to "get a good job that pays good money".
"Then you can go to the bank and you can borrow money and that's readily affordable," he said on Tuesday, while also calling on state governments to do more to increase the housing supply.
Opposition Leader Bill Shorten labelled the Treasurer's remarks "a brain snap", while economists have warned that even a good paying job is no guarantee when it comes to home affordability in Sydney.
Meanwhile, a report by HSBC shows Australian home prices have risen 24 per cent in the past three years, though the gains have mostly been confined to Sydney and Melbourne.
Sydney prices have jumped 39 per cent, while Melbourne prices were up 22 per cent, though the average price for the rest of the country was 10 per cent.
"We have few concerns about a nation-wide bubble, but the Sydney market has an exuberance that is worrisome," HSBC chief economist Paul Bloxham said.