The Australian dream of homeownership is slipping away for many young Aussies, and it's not just a Sydney issue.
According to Domain's First Home Buyer Report for 2026, the average entry-level house repayment now consumes almost half of a couple's income across our capital cities, a staggering 48.9%. And it's not just houses; even units, once seen as a more affordable option, now demand 30.9% of a household's earnings.
But here's where it gets controversial: despite government schemes and interest rate cuts, affordability has worsened over the past year. Entry-level home prices are rising faster than wages, and the traditional gateway to homeownership - units - is narrowing.
The Rising Costs of the Australian Dream
Domain's research reveals a worrying trend. An entry-level home, defined as the 25th percentile, is becoming increasingly out of reach. Sydney remains the most expensive, with couples aged 25-34 needing to dedicate 61.8% of their income to service a mortgage. But other capitals are catching up fast.
"This is no longer just a Sydney problem," says Nicola Powell, Domain's chief of research and economics. "Brisbane, Adelaide, and Perth have seen rapid growth in entry-level prices, pushing them closer to the least affordable markets."
Units, once considered a 'safety valve' for first-time buyers, are no longer a sure bet. The time needed to save for a 20% deposit for a unit has escalated, and in some capitals, this 'safety valve' has broken down.
For example, in Brisbane, couples need to save for four years and 11 months, compared to Sydney's four years and five months. And when it comes to houses, Sydney is in a league of its own, with a staggering seven years and seven months of saving required.
Melbourne and Canberra have seen more moderate property rises, but even there, the time needed to save for a first home has increased. National initiatives like the 5% deposit scheme have helped some, but concerns remain about adding to demand.
The Challenge of Rising Property Prices
Property prices are rising significantly faster than wages, creating an additional hurdle for young Australians. Over the past five years, wages grew 21% compared to inflation at 23%, but real estate prices spiked much higher. Nationally, entry-level houses rose by 68%, with Adelaide, Brisbane, and Perth seeing increases of over 100%.
"Interest rate cuts in 2025 offered some relief, but they couldn't undo years of strong price growth and rising household debt," Dr. Powell explains. "Affordability worsened in many markets, even as rates fell."
The Impact on Young Australians, Especially Women
Cotality's 2026 Women & Property report paints a similar picture, highlighting the challenges faced by young Australian women. Gen Z and millennial women place less importance on owning property, often discouraged by high mortgage repayments and difficulty qualifying for loans.
Deposits, stamp duty, and transaction costs are major obstacles for aspiring female buyers. Men are more likely to invest in major upgrades, while women prefer smaller, lower-cost changes, focusing on upfront affordability.
Australia's Most Accessible Real Estate Markets
Darwin tops the list for first-home buyers, with the shortest saving timelines for both houses and units. Domain suggests outer-metro and peri-urban areas as more affordable options in bigger cities. In Sydney, Mount Druitt, Fairfield, and Liverpool offer the fastest route to homeownership, while Essendon and Stonnington-West are Melbourne's most affordable destinations.
However, fast-rising home prices remain a problem across every state and territory. Once-affordable cities and property types are now prone to mortgage stress.
"Everything needs to be on the table for discussion," Dr. Powell emphasizes. "A multi-pronged approach is required, including stamp duty reform, incentivizing affordable home supply, deposit assistance, and broader tax, retirement, and pension settings. Without sustained action, homeownership could permanently slip out of reach for many young Australians."
So, what do you think? Is homeownership a realistic dream for young Australians today? Share your thoughts in the comments!
