Why It’s Harder To Buy A Home Today
Takes only 4 minutes
17 Oct, 2025
Updated: 17 Oct, 2025
If you have worked, saved and planned, but homeownership still feels further away, you are not imagining it.
The National Housing Supply and Affordability Council’s 2025 report shows affordability is at new lows.
- Around 50% of a median household’s income is now needed to service a new mortgage, 33% is needed for a new lease.
- The national price-to-income ratio has reached 8.0.
- The time it takes to save a 20% deposit has stretched to 10.6 years (up from 8.6 only a few years ago).
The question isn’t whether it’s harder — it’s why.
Act I: The Rules Changed — And The Market Kept Up
A generation ago, a single income could buy a family home. As dual-income households became the norm, purchasing power increased, and prices adjusted to match the higher ceiling.
The result shows up in the affordability data: only 14% of homes sold in 2023–24 were affordable to a median-income household, the lowest share in the series since 1995.
That is the first quiet shift: the market now prices to two salaries.
At the same time, jobs, education and transport became more concentrated in the capitals. Proximity turned into the real premium.
Land has not disappeared. Well-connected, serviced land close to opportunity has.
When thousands of households compete for the same train lines, school zones and job hubs, the price of “place” climbs faster than wages.
Expert Lens: When people ask, “Why can’t we just move farther out?”, the answer is often hidden costs — longer commutes, fewer services and future resale risk. In modern Australia, value follows connection.
Act II: The Mechanics You Can’t See, But Always Feel
Two forces now do most of the heavy lifting: Supply and borrowing power.
1. Supply has lagged behind the people who need homes.
In 2024, completions were about 177,000 and, after demolitions, net additions were about 155,000. Underlying demand was about 223,000, which left a gap of nearly 68,000 and added to the backlog.
Under the 2024–2029 Housing Accord, the build forecast is about 938,000 against the 1.2 million goal, meaning a shortfall of about 262,000 dwellings. Every state and territory is projected to miss its implied share.
The reasons are practical: feasibility squeezed by higher financing and construction costs, long delivery times, planning complexity, labour constraints and a pipeline that has been slow to restart, especially for mid- and high-density.
Input material costs for detached house construction have risen by roughly 34% since 2018, while construction wages increased by about 14% over a similar period.
2. Borrowing power is the invisible price ceiling.
Property prices rise and stall with what banks will lend. When rates fall, capacity rises and sellers see higher bids. When rates rise, capacity falls and prices cool.
This is why waiting purely for interest-rate cuts rarely fixes the entry problem. Relief in repayments can be offset by renewed price pressure.
Expert Lens: Think of supply as the long tide, and borrowing power as the waves on the shore. The tide sets where the waterline lives; the waves decide what you feel week to week.
Act III: How This Affects You
These mechanics become personal very quickly.
- Only a small share of listings are now affordable to a median-income household.
- New mortgages take about half of household income to service.
- Renting is not a comfortable waiting room, with persistent rental stress for many low-income households.
Add it up, and the path from “saving” to “settled” has lengthened, which is why the average deposit now takes more than a decade to build in major cities.
Expert Lens: This is not about poor budgeting or “lattes.” It is the arithmetic of wages versus prices, multiplied by scarce, well-located supply.
Act IV: What Still Works (And How To Act On It)
Here is the practical, hopeful part.
You cannot control the system, but you can control your strategy.
1. Let location do the heavy lifting
Target connected corridors where trains, schools and services are funded or improving. In many cases, the “next-door” postcode on the same rail line provides similar amenities for a lower entry price. Proximity compounds value over time.
2. Broaden the definition of home
Apartments and townhouses are not a downgrade when they place you in the right location. Mid-rise, well-managed buildings near parks and stations often deliver the lifestyle people want without the price tag of detached land.
Do the due diligence: strata health, sinking funds, building reports, energy performance and defect history.
3. Treat finance like a planning tool, not paperwork.
Run a precise borrowing power model and scenario-test it for rate movements of 0.5 to 1.0 percentage points. Keep pre-approval current so you can act quickly when you find the right property. Structure matters: offset and redraw features, fixed-versus-variable mix, and genuine buffers all protect you against the next rate cycle.
4. Use the ladders built for today’s market.
Don’t keep comparing your strategies with the previous generation. Use the strategies and options you have now. Low-deposit options exist so you can buy your home sooner and your income can stretch further. If eligibility fits, they can bring your timeframe forward without years of extra rent.
5. Search with the pipeline in mind.
Housing stock arrives first in areas with improving approvals and commencements. That matters if you want choice, less competition, and fewer bidding wars.
Ready To Make A Plan That Fits Your Life?
The housing system has changed, but that doesn’t mean your dream has to fade.
Our brokers at Home Loan Experts specialise in finding real solutions that fit your income, lifestyle, and goals, even when the market feels out of reach.
We understand the complexity behind affordability and policy and we’ll help you find a lender that matches your circumstances, not the other way around.
We’ll do all the hard work for you — so you can focus on finding your home, not fighting the system.
Call us on 1300 889 743 or enquire online today.
