It's not just first-time buyers struggling to purchase houses in Sydney — with families squeezing into small apartments long after they have outgrown them as they struggle to make the financial leap into house ownership.

Key points: Houses increasingly "out of reach" for apartment-dwelling families looking to upgrade, father says

Houses increasingly "out of reach" for apartment-dwelling families looking to upgrade, father says Housing affordability high on State and Federal Governments' agendas for upcoming budgets

Housing affordability high on State and Federal Governments' agendas for upcoming budgets Scheme that directs pre-tax earnings to special savings account on the table for federal budget

A husband and wife live with their three children in an apartment in Bexley North.

They have been trying for eighteen months — unsuccessfully — to upgrade to a house that is big enough to fit their growing family.

"Now as prices keep going up that just pushes that further and further away of being able to make that move," the father told the ABC.

"It does make it difficult to move out of an apartment and upsize."

The family were one of several groups bidding on a house for sale in southern Sydney, in the area where they live already and their children go to school.

"I see a lot of apartment-type people who have got families as well who are also in the same position, looking to upsize, and it's just getting more and more out of reach," the father said.

Trying for a housing affordability fix

A quick fix for housing affordability is high on the State and Federal Governments' agendas for their upcoming budgets.

A scheme which would allow people saving for a property to direct pre-tax earnings into special savings accounts appears to be an option on the table for the upcoming federal budget.

Back in the housing-crisis heartland, the NSW State Opposition wants to bring in a tax on properties left vacant for longer than six months.

Labor says the 1 per cent tax would apply to houses that are not under construction, holiday homes or deceased estates and would mirror a scheme the Victoria government is adopting.

"We believe that it is enough of an incentive for people to put their properties either on the rental market or on the property market and encourage that circulation, encourage that increase in supply and therefore put some real incentives for first home buyers to get a foot in the door," Shadow Treasurer Ryan Park said.

The policy has been criticised by the Premier.

"Sydney has some of the lowest vacancy rates in the nation and that won't even touch the sides but a lot of good people will get caught up in it," Premier Gladys Berejkilian said.

As the auction came to a close in Bexley North, the four-bedroom home was auctioned to someone else, but the apartment-dwelling family is not giving up hope yet.

"All we can do is keep trying."

He was sceptical of more schemes, as he looked around at all the other prospective home-buyers desperate to get a Sydney property.

"Regardless of what you do, there's always something to counterbalance that," he said.