A new report found that Australian housing affordability remains near record lows in data dating back to 1995, despite a lower mortgage rate.
Research published by the REA Group and the Commonwealth Bank analysing the situation for first home buyers found that a surge in mortgage rates between 2022 and 2023 pushed housing affordability to the lowest level for households of all incomes.
"This is especially true for first home buyers, as they are typically younger than existing home owners, earlier in their careers, and earn lower incomes,” the report said.
Prospective home buyers between the ages of 25 to 39, earning A$129,000 annually, could only afford the mortgage on 17% of homes sold last year, according to the report, the lowest level since 1995.
In comparison, existing owners with a mortgage could afford 33%.
REA Group senior economist Angus Moore said saving for the first deposit was the greatest challenge, as well as low affordability and tough mortgage serviceability.
However, Moore said there were more first homebuyers in the past year than in the 2010s.
"Despite these conditions, first home buyers are finding ways to enter the market," Moore said.
"Many also seek homes in more affordable areas or purchase semi-detached homes or units to overcome affordability challenges."
He also said market conditions were improving with interest rates falling from their peak, with further rate cuts expected.
As of June 2025, an average-income Australian household would need to save for the equivalent of 5.9 years to put down a 20 per cent deposit for a median-priced home.
South Australia has the highest deposit hurdles, while Western Australia has the lowest.
