Australia’s housing market looks almost unbuyable on traditional affordability metrics, yet first‑home buyers are still signing contracts. That apparent contradiction is at the heart of new analysis from Ray White chief economist Nerida Conisbee (pictured), who argues that headline ratios no longer capture how people actually get into the market.
The latest Cotality Housing Affordability Report puts the national dwelling value‑to‑income ratio at 8.2 in September 2025, compared with a 20‑year average of 6.8. It is now estimated to take 11 years to save a 20% deposit, and “45% of gross household income is required to service a new mortgage”. Three of the four key measures in the report are sitting at their weakest levels on record.
Nearly half of Australians no longer believe they’ll ever own a home, a fear mortgage brokers say is increasingly visible in loan enquiries and pre‑approvals.
Despite that, Conisbee says the real question is “how buyers are still able to transact at these levels”, not simply why housing is expensive.
One problem, she notes, is that the widely quoted price‑to‑income ratio “implicitly suggests the median-income household is attempting to purchase the median home”. In practice, most first‑timers are shopping much further down the price ladder.
Sales data show detached house transactions under $750,000 have dropped sharply over the past decade, while sub‑$750,000 unit sales have grown. Entry‑level detached stock has shrunk, pushing more buyers toward higher‑density options. Instead of walking away altogether, many are swapping land and space for apartments that keep them in their preferred area.
Government intervention is another major reason the market is still ticking over. ABS figures show first‑home buyer owner‑occupier loans rose 6.8% in the December quarter, alongside an expanded 5% Deposit Scheme and the rollout of the Help to Buy shared‑equity program.
These schemes “do not make housing inexpensive, but they change the structure of entry by redistributing risk and bringing forward demand,” Conisbee said.
For many younger Australians, the “Bank of Mum and Dad” is just as important. Parents who have benefited from decades of price growth are increasingly providing lump‑sum gifts, guarantees, or early inheritances to bridge the deposit gap. More parents are also now hiring buyers’ agents instead of offering guarantees or big cash gifts, turning the “Bank of Mum and Dad” into strategic, on‑the‑ground support.
Lending practices further blur the link between prices and incomes. Thirty‑year loan terms, refinancing, lenders mortgage insurance, and government guarantees all shape how much banks are prepared to advance and how repayments are structured over time.
Conisbee stresses this doesn’t mean housing has become affordable again. Instead, it shows that “housing markets adapt”, with buyers changing what they buy, how they fund it, and who they lean on for support.
Ratios still flag that property is expensive relative to income, but understanding who can actually purchase now means looking beyond a single number to the interaction of policy, credit, family wealth, and dwelling choice.
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