New Challenges for Aussie Home Buyers

6

Rents on the Rise

One of the key challenges faced by prospective home buyers is the significant rise in rents. This surge in rental costs makes it increasingly difficult to save up enough money for a deposit on a property. In fact, according to CoreLogic, it currently takes the average household around 10 years to save up a 20% deposit on the median priced Australian home.

Home Values Pushing the Dream Further Away

The rising trend in home values is another obstacle preventing many Australians from achieving home ownership. As these values continue to soar, the prospect of owning a home becomes even more distant for the average buyer.

Mortgage Rates on the Rise

Finally, the ongoing increase in mortgage rates exacerbates the challenges faced by home buyers. Higher interest rates make it more difficult for buyers to secure a mortgage on affordable terms.

The gap between what the median buyer can afford and the actual median price is currently at its widest level in over 20 years:

For instance, while the median capital city home in Australia is valued at $741,000, the median household with a 20% deposit could realistically afford to pay only up to $479,000 to avoid mortgage stress.

According to Eliza Owen, CoreLogic’s Head of Australian Research:

"There's probably more challenges than ever for first home buyers trying to get into the market. The median dwelling value, for the median income, is not really serviceable with a 20% deposit at the moment. If you don’t own housing already, it’s very difficult for incomes to keep pace with the movement of values, particularly for houses."

Adelaide Timbrell, ANZ senior economist, further adds that the housing affordability situation is expected to worsen in the coming year as house prices and rents continue to rise:

"We’re not seeing any reason to think there's going to be a turnaround in housing affordability any time soon."

Unfortunately, the Australian Dream of owning a home is drifting further out of reach. The record immigration program implemented by the Albanese government is compounding the issue, leading to increased house prices, rents, and interest rates.

Published:Wednesday, 29th Nov 2023
Source: Paige Estritori

Share this news item:

Finance News

Clear

Auditor Deregistered After Brite Advisers Collapse 30 Jun 2025: Paige Estritori The Australian Securities and Investments Commission (ASIC) has deregistered auditor David Makowa, previously of DM Advisory Services, due to his role in the downfall of financial advice firm Brite Advisers. This decision follows Makowa's acceptance of a court-enforceable undertaking in which he agreed to surrender his auditor registration permanently, pledging never to re-apply. - read more

US Involvement in Israel-Iran Conflict Sparks Financial Market Concerns 23 Jun 2025: Paige Estritori The escalating likelihood of the United States engaging militarily in the Israel-Iran conflict has raised alarm among investors, potentially leading to significant market volatility. This concern was highlighted by the global financial advisory firm, deVere Group, as tensions heighten in the Middle East. - read more

Global Markets Brace for Oil Price Surge Following US Strike on Iran 23 Jun 2025: Paige Estritori The recent US military attack on Iranian nuclear facilities has raised expectations of a significant oil price spike as global markets prepare to resume trading. Announced by former President Donald Trump, the attack marks an increased US involvement in the Middle East, which analysts believe could lead to heightened volatility across financial markets. - read more