Even though young singles and couples make up at least half of the large numbers still attending open homes for the most affordable properties, they are struggling to compete with the fatter wallets of investors.

The McGrath agent Simon Exleton says the lure of higher rents is leading to a competitive marketplace, particularly for inner-city apartments.

''Investors are out of the stockmarket and into the property market,'' he says. ''In the sub-$750,000 zone investors can make 4.5 per cent to 6 per cent on their property purchase so investors set the benchmark which first-home buyers need to meet.''

A two-bedroom apartment in Wattle Street, Pyrmont, sold before auction for $635,000 in March, leaving first-timers without a chance. ''An investor rushed in to secure the property before the first-home buyers,'' said John Zheng of LJ Hooker.

At one unit in Chalmers Street, Redfern, the rivalry between first-timers and investors led the vendor to increase the asking price from $539,000 to $559,000.

''Even during the boom I have never had 70-80 people through a private treaty inspection,'' said Michael Xanthoudakis of Richardson & Wrench. ''About 70 per cent of those were young professional couples in their mid to late 20s and the rest investors.''

Emma Campbell, 26, an occupational therapist, and her fiance Blake Williams, 25, a personal trainer, have recently given up the search. Despite getting married in October, they are staying with her parents.

"We found that you are not only competing with other first-home buyers but also with investors," Campbell said.

''We have been looking for cheap properties which haven't been done up.''

Apartments have long been the first choice for investors because of their higher returns on lower outlays and the ease of maintenance. But it's also increasingly the preference of first-home buyers because the lower price means they can stay closer to the city.

Yet the senior economist at Australian Property Monitors, Andrew Wilson, says first-home buyers are being priced out of the Sydney market. "People are seeking an entry point that keeps getting higher and higher,'' he says.

''[Young people] are either staying at home longer or competing in a tight rental market."

The affordability issue is evident in the first-home owner loans statistics.

When the government's first-home owner boost paid up to $14,000, first-home owner loans peaked at 19,043 in May 2009. In April this year there were 7020 loans issued, down from 8087 in March.

But the size of the average loan is rising from $279,500 in March to $285,400 in April, the highest level since July last year.