The report, reveals that while mortgage serviceability and savings time have improved over the past year, high home prices and rising debt costs continue to pose significant challenges for young buyers.
Key Findings:
- Across Australia’s combined capital cities, saving for an entry-priced unit takes 20 months less than saving for a house.
- The gap is widest in Sydney (2 years, 5 months faster) and Canberra (2 years, 4 months faster).
- Brisbane, Adelaide, and Perth were the only cities where saving times increased for both houses and units, due to double-digit price growth outpacing wage growth.
- Melbourne is the only capital city where saving times for both houses and units decreased over the past five years, making Victoria the national leader in first-home-owner participation.
- Sydney remains the most expensive city for first-home buyers, while Darwin offers the fastest path to homeownership, requiring just 3 years and 5 months to save for an entry-level house and 2 years and 1 month for a unit.
Rising property prices widen the affordability gap
Domain’s Chief of Research and Economics, Dr Nicola Powell, said the report highlights the growing challenges first-home buyers face in Australia.
“In the past five years, entry house prices have increased 58%, while unit prices have risen by 27%. Meanwhile, inflation surged 20%, and wages only grew by 15%. This shows the growing gap between earnings and property costs, making it harder for first-home buyers to get into the market,” Dr Powell said.
However, she noted some positive trends in specific markets.
“But there’s some good news in certain areas. In Sydney, while it’s still the toughest city overall, it’s now 15 months faster to save for an entry-level unit compared to five years ago. This is thanks to higher wages, better interest rates on savings, and more stable unit prices. On the flip side, Brisbane, Adelaide, and Perth have seen longer saving times for both units and houses because prices have risen faster than wages and saving rates.”
Darwin: Australia’s most affordable capital for first-home buyers
Darwin continues to offer the shortest path to homeownership, with savings time significantly lower than other capital cities.
“Darwin is still the top city for first-home buyers. It has the quickest path to homeownership, with just 3 years and 5 months needed for an entry-level house and 2 years and 1 month for a unit—half the time it takes in Sydney.”
Government action needed to address housing affordability
Dr Powell emphasised the need for government intervention to address housing affordability and supply shortages.
“These differences highlight the huge gap in affordability across cities, making it clear that coordinated government action is needed to tackle Australia’s housing shortage. The National Housing Accord, which aims to build 1.2 million homes in the next 5 years, is a step in the right direction. But it’s crucial for all levels of government to work with the industry to ensure we have enough affordable housing in the future.”
