First-home buyers are taking longer to save deposits in every Australian capital city, with rising entry-level prices outpacing any relief from last year’s interest rate cuts.
New research from Domain shows saving for a 20 per cent deposit on an entry-level Sydney house now takes seven years and seven months – up 10 months in just one year.
Brisbane has overtaken Sydney as the city requiring the longest saving time for an entry-level unit, marking a significant shift in affordability patterns.
“First-home buyers are being locked out of more markets than ever before, and those who do manage to buy are taking on greater financial risk than at any time in the past decade,” said Dr Nicola Powell, Domain’s Chief of Research and Economics.
The research found national entry-level house prices have risen 68 per cent over five years, while wages grew just 21 per cent. Unit prices increased 30 per cent over the same period.
Cities once considered affordable alternatives are catching up fast. Perth, Brisbane, Adelaide and Darwin all recorded annual entry-level price growth above 20 per cent.
“What’s most concerning is that this is no longer just a Sydney problem,” Dr Powell said.
“Brisbane, Adelaide and Perth, once seen as more attainable, have seen rapid growth in entry-level prices, pushing them much closer to the least affordable markets.”
Mortgage stress remains widespread across all capitals. Sydney buyers face the toughest conditions, with entry-level house repayments consuming 61.8 per cent of household income.
Across the combined capitals, repayments on an entry-level house now average 48.9 per cent of income – an increase of nearly 24 percentage points over five years.
Units have traditionally offered a faster path to ownership, allowing buyers to enter the market about 20 months sooner on average. But that advantage is shrinking.
In Adelaide and Perth, the difference in saving time between a unit and a house is now 18 months or less.
“Units have traditionally been the stepping stone into home ownership, but even that pathway is narrowing,” Dr Powell said.
“In several capitals, unit buyers are now stretching themselves into mortgage stress.”
Darwin remains the most accessible market, with entry-level unit deposits achievable in two years and seven months – though even that timeline has increased by five months over the past year.
Government schemes including the five per cent deposit program and Help to Buy shared equity arrangements have helped some buyers enter sooner. However, the report found these measures haven’t addressed underlying affordability pressures, particularly in higher-priced markets.
“This shows the affordability challenge has become a deeper, structural problem,” Dr Powell said.
“Getting into the market now depends more on where you live, how much you earn and whether you have family support than simply how well you save.”
Sydney remains the only capital with entry-level houses priced above $1 million.
