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Home ownership on hold: Buyers now face a decade of saving
Buyers will now need over a decade to save a 20 per cent deposit, as house values have raced ahead of wage growth over the past five years.
Affordability has fallen sharply when compared to household income, with the house value now 8.9 times higher than the median income, according to the Cotality Housing Affordability Report.
While median income estimates increased by 20 per cent over the five years to September 2025, they were vastly outpaced by property values and rents, which rose by approximately 53 per cent.
Cotality head of research, Eliza Owen, said that a combination of factors had led to house prices skyrocketing and deteriorating affordability.
“Australian homes have climbed roughly 47.3 per cent since March 2020, an extraordinary rise that added about $280,000 to the median dwelling value,” Owen said.
“This surge was fuelled by pandemic-era monetary stimulus and record-low interest rates that supercharged borrowing capacity and demand, even as housing supply lagged well behind household formation.”
Owen noted that supply-side constraints also compounded demand pressures, as construction issues, rising material costs, and planning bottlenecks restricted new deliveries.
“In short, the past five years combined extraordinary drivers with supply constraints, creating an extraordinary boom in both home values and rents,” she said.
The data found that, nationally, it would take 11 years on average to save up to the standard 20 per cent deposit for a dwelling.
The jump in dwelling value has been softer when comparing units to houses: Units climbed from 6 times annual income to 6.7 times over the five-year window, while houses went from 6.6 times to 8.9 times.
While escaping the nation’s capitals for regional markets used to be a favoured option for buyers, the affordability gap between the two has significantly diminished.
The median dwelling value-to-income ratio for regional markets now stands at 8.1, while in capital cities it is 8.2, erasing what was once a more affordable alternative for those looking to buy outside metropolitan areas.
The data found that Sydney remained the most expensive city in the country, with the value of a dwelling sitting 10 times higher than the average income, leaving buyers in the NSW capital saving for 13.3 years to build up a 20 per cent deposit.
NSW regional markets saw a similar trend, leading the country in the least affordable properties, with buyers taking 12.1 years to save a 20 per cent deposit.
Although deposit-saving times and dwelling value-to-income ratios remain below their 2022 peaks, Cotality data indicates they could climb to new highs in the December quarter amid strong market conditions.
Data showed that Adelaide now ranks second as the nation's least affordable city, with average home prices rising by 77.2 per cent over the previous five years, compared to a 20.1 per cent growth in household income
Following the price increase, Cotality showed that Adelaide buyers will need 12.3 years to achieve a 20 per cent deposit.
Meanwhile, in Brisbane, house prices have risen to 9.7 times the average income, ranking the city as the nation’s third least affordable capital city to purchase a home.
Brisbane was followed by Perth, Hobart, Melbourne and Canberra, which all required between eight and 10.5 years to save for a 20 per cent deposit.
In contrast, data found that Darwin was the most affordable capital to buy a home, with residents needing to save for only 5.7 years to afford a 20 per cent deposit.
The report said that poor capital growth over the past decade had been essential to maintaining affordable dwellings in Darwin and the Northern Territory, with the amount required to service a mortgage below 30 per cent of the average income.
However, Cotality forecasted that Darwin would likely begin to catch up, with property values experiencing rapid growth, surging by 13.1 per cent year to date.
Owen said that the report’s findings had made it clear that sustainable housing affordability cannot be achieved by relying on short-term market corrections.
“While temporary declines in property values may offer a brief relief, they are not a lasting solution.”
“Even if growth slows, the underlying gap between housing values and incomes will persist unless meaningful reform is pursued,” Owen concluded.