Australia’s housing crunch has escalated to a new level.
"The affordability problem is definitely real," Paul Katranis, founder and director at SA Wealth Group, told Australian Broker. "There is definitely a cost-of-living issue at this point in time and it's across the board."
Katranis, who is based in Adelaide, South Australia, but works with clients across the country, said, "there's no difference" from market to market. "We've got clients in Sydney, Melbourne, Brisbane, Gold Coast and also Perth, and they're all experiencing the same sort of thing.
"People are getting priced out in areas that ordinarily, in the last three or four years, wouldn't have been an issue," the broker explained. "What we thought was the norm is no longer the norm. Everything is priced much higher. The cost of new builds and materials have gone up. So then obviously an existing asset that sits next door has been priced up as well, accordingly.
"So people are just getting pushed out, further out from the CBD or the metro areas," he continued. "They're going further up north or down South to more affordable areas. And it does change, obviously, the dynamics in terms of their lifestyle, work, commuting."
In fact, despite three rate cuts in 2025 and updated government schemes designed to help first-time buyers are finding it increasingly hard to get on the property ladder. According to Cotality, the company formerly known as CoreLogic, it would take the average wage earner roughly 12 years to save the standard 20% deposit. But the timeline only increases in Australia's pricier markets. In Sydney's Eastern Suburbs, for example, it would take more than three decades.
What's more, the cost of a stand-alone home remains stubbornly high: the median house now clocks in at 8.9 times the average income. And even for those who manage to scrape together a deposit, the financial pressure doesn’t ease. Servicing a new loan now consumes roughly 45% of the median household income, according to Cotality.
All of that coupled with the nation's persistent housing shortage, makes finding — and buying a home— increasingly difficult.
"Supply-side limitations have also compounded these demand pressures with construction sector insolvencies [and] rising material costs, and planning bottlenecks restrict new housing delivery," said Eliza Owen, Cotality's head of research.
She described the nation's surging home values "an extraordinary rise": more than 47% rise in home values since March 2020, or an extra $280,000 tacked on top of the median dwelling value.
In the most recent quarter, or the three months leading up to September, Cotality's Home Value Index (HVI) found that median house prices grew by approximately $18,215 nationwide. Looking ahead, forecasts suggest that median house prices in Sydney, Australia's premier market, could reach $1.9 million by the end of 2026.
But the challenges extend well beyond first-time homebuyers.
Daniel Green, director and mortgage broker at Queensland-based Green Finance Group, said: "We’re seeing the same serviceability pressure on upgraders and self-employed clients. Housing affordability is undeniably tough."
Renters are feeling the pinch too, with tenants now handing over a record share of their income — more than 33% — to pay rent. Katranis, who also works with renters and landlords, said many landlords have increased their lease prices as purchase prices have gone up, because the cost to build has also gone up.
Owen added: "In short, the past five years combined extraordinary demand drivers with supply constraints, creating an extraordinary boom in both home values and rents."
Would-be buyers and aspiring upgraders are coping by finding homes outside of the major metro areas, seeking homes in regional areas or even relocating to a different state altogether.
"Unfortunately, buyers need to look at areas that suit them better, or have a chat with someone who's got access to properties that are being built off-market," Katranis said. "There's definitely quite a bit of land developments being released in metro Adelaide, for example. So that is a solution. Typically, it's the case of can they get their hands on anything that's coming to market that's a part of a bigger government land release. But we're definitely also seeing a lot more influx into Adelaide because of the pricing aspect. People have been priced out of say, your Sydney, Melbourne or Brisbane markets.
"But there is also a realignment of expectations around buying in a metro area at a particular price point," he continued. "Now buyers have to go further north or south to secure a property — and that's normal. That's the typical scenario in Melbourne, Sydney and Brisbane. If you're trying to buy in the CBD areas, you're priced out unfortunately."
