A new housing affordability report from property analytics firm Cotality shows that since the COVID-19 pandemic in 2020, Australian home prices have risen by 47.3 percent, with an average increase of around AUD 280,000. The report notes that in most capital cities, it now takes over a decade to save a standard 20 percent deposit, pushing housing affordability to historic lows.
Sydney remains the most expensive city, requiring an average of 16.7 years to save for a deposit. Other cities also require more than ten years: Adelaide (13.1 years), Brisbane (12.9 years), Melbourne (11.2 years), Perth (10.8 years), and Hobart (10.6 years). The most affordable cities are Darwin (6.8 years) and Canberra (9.5 years).
The report indicates that three key national indicators reached record highs this year: the price-to-income ratio, the number of years required to save a deposit, and the share of income needed for rent. In October, home prices rose 1.1 percent compared to September, marking the fastest monthly increase in more than two years. Housing costs have risen far faster than income, with the median house price now 8.9 times the average income, up from 6.6 times five years ago.
For renters, households now need a record 33.4 percent of their income to cover rent. Affordability in regional areas has declined, narrowing the gap with capital cities.
The report forecasts that in 2026, home prices in capital cities will rise between 6 and 10 percent, with Perth, Brisbane, and Adelaide expected to see the largest increases, while Sydney and Melbourne are likely to experience more modest growth. Although interest rates may remain stable in the short term, the report warns that challenges to housing affordability are expected to persist.