Australia’s first-home buyers are being hit by a “dual affordability constraint”, with new Domain data showing deposits are taking longer to save while mortgage repayments remain painfully high even after purchase in 2026.
The Domain First-Home Buyer Report warns that “first-home buyers in 2026 face a dual affordability constraint: deposits are taking longer to accumulate, and repayments remain elevated once buyers enter the market.”
Affordability is splintering across the capitals. The time to save a 20% deposit now stretches from just two years and seven months for an entry-priced unit in Darwin to a massive seven years and seven months for an entry-priced house in Sydney.
Brisbane, Adelaide and Perth have recorded some of the sharpest deteriorations, as rapid entry-level price growth brings them closer to Sydney on key affordability measures despite lower absolute prices.
Over the past five years, entry house prices nationally have surged 68%, while wages have risen just 21% and inflation 23%, widening the gap between saving capacity and upfront costs. The Domain report notes that “changes in saving timelines reveal that affordability pressures are no longer driven by interest rates alone.”
Separate national survey data echo the strain: nearly one in two Australians now doubt they’ll ever own a home, as shrinking borrowing power and tighter serviceability tests lock more people out of the market.
Units have long been the cheaper entry point, and brokers say the Great Australian dream is shifting as more buyers swap the quarter‑acre block for compact units – but that safety valve is now breaking down in several cities.
“For the first time on record, Brisbane has overtaken Sydney as having the longest time required to save for an entry-priced unit,” the report finds, with Adelaide and Perth also moving up the rankings as unit prices jump.
By contrast, Melbourne and Canberra have seen more modest unit price growth, and in Canberra’s case, the highest average incomes are helping shorten saving timelines and improve serviceability despite relatively high prices.
Domain finds that “mortgage stress remains widespread despite rate cuts in 2025.” Every capital is now above the 30% income threshold for entry-priced houses. In Sydney, repayments on an entry-priced house consume 61.8% of household income; Brisbane sits at 50%, with Adelaide at 44% and Perth at 42%.
Policy support is increasingly focused on reducing the size of the upfront deposit. The Australian government 5% Deposit Scheme “delivers a material reduction in the time required to save,” shaving up to five years and seven months off Sydney house deposit timelines. The federal Help to Buy Scheme goes further by cutting both deposit and mortgage size, easing serviceability, especially for units.
However, the Domain report concludes that “Australia’s housing affordability challenge is increasingly structural rather than cyclical,” arguing that lasting relief for first-home buyers will depend on coordinated reforms that tackle deposits, transaction costs, lending settings, and housing supply – not just interest rates.
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