Why that home you could afford in 2018 is now a fantasy - with Aussies urged to buy now before it's too late
The average Aussie can no longer afford the typical big city house they could seven years ago after property price rises soared at triple the pace of wages.
Record-low interest rates during Covid followed by record-high immigration levels have caused house prices to climb by double-digit figures in some years.
Across Australia, prices have surged by 56 per cent since 2018 but in Brisbane, house values have soared by 86 per cent and almost doubled in Adelaide.
By comparison, overall wages have increased by just 18.6 per cent - or a third the level of property price increases.
Finder personal finance expert Sarah Megginson said entry level prices were only likely to keep soaring, despite the high levels of mortgage stress.
'Demand – especially in affordable markets – is expected to surge, which could potentially push entry-level prices even higher and squeeze first home buyers further,' she said.
Back in 2018, Australia's middle home price covering houses and units stood at $532,327, CoreLogic data showed.
With a 20 per cent deposit, the average, full-time worker earning $83,486 was at a pinch able to get a loan and borrow five times their salary before tax.
Seven years later, Australia's median home price now stands at $831,288.
Someone earning the new average, full-time salary of $102,742 with the equivalent deposit would now have to borrow 6.5 times their income - putting them in the severe mortgage stress territory.
The banks are reluctant to lend a prospective borrower more than five times their pay, with the Reserve Bank's two rate cuts in 2025, so far, hardly undoing the 13 increases in 2022 and 2023.
The 3.85 per cent cash rate is the lowest since June 2023 but is still a far cry from the Covid record low of 0.1 per cent.
Lower interest rates increase borrowing capacity, but they also put up house prices.
Sydney, Australia's most expensive property market with the biggest inflow of overseas migration, has seen its mid-point house price climb by 49 per cent since mid-2018, with prices rising from $998,270 to $1.486million.
But in Brisbane, house prices have soared by a whopping 85.7 per cent from $538,693 to just over $1million in a city with a large influx of interstate migration.
Record-low interest rates during Covid followed by record-high immigration levels caused house prices to climb by double-digit figures during some years (pictured is a Sydney auction)
Perth prices have soared by 69 per cent from $481,612 to $813,810, in another city with strong population growth from other parts of Australia.
Adelaide house prices have almost doubled, surging by 89.3 per cent from $465,992 to $882,157.
Melbourne, however, is the exception to other major capital city markets with its mid-point house price climbing by just 15.6 per cent from $813,064 to $939,965.
This was the only big capital city where house prices increased at a pace slower than wages growth.
What if I'm single?
Single Australians earning the average wage were able to buy the median-priced house in most capital cities, except Sydney and Melbourne, less than a decade ago.
But that's dramatically changed with only working couples now having a chance in most capital city markets.
A Finder analysis revealed South Australia has seen the biggest decline since 2017, going from having 85 per cent of suburbs being affordable for singles to 19 per cent.
The ratio in Western Australia has fallen from 67 per cent to just 17 per cent.
In Queensland, it's plunged from 66 per cent to 19 per cent.
New South Wales, which was an overpriced market eight years ago, saw the proportion of affordable suburbs fall from 40 per cent to 11 per cent.
Despite weak price growth in Melbourne, the proportion of affordable suburbs in Victoria had declined from 50 per cent to just 16 per cent.
'Buying a home is harder than ever, especially if you're trying to do it on your own without a partner or family member,' Ms Megginson said.
'First home buyers are not expecting to step into a mansion for their first property, but even those with realistic expectations are shocked that even entry-level homes carry eye-watering price tags.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
an hour ago
- The Independent
A third of renters could be ‘forced out' by average rent rise, research finds
Millions of renters could be forced to move house despite Labour 's pledged protections, campaigners say, as new research lays bare the toll of massive rent increases. Over two-thirds of renters say they would definitely (34 per cent) or probably (34 per cent) need to move home if given a rent rise of £110, polling from the Renters' Reform Coalition (RRC) shows. The research comes ahead of Labour's Renters' Rights Bill, which is expected to pass later this year. The legislation will bring an end to controversial Section 21 'no-fault' eviction notices, as well as empowering tribunals to protect tenants from unreasonable rent increases. But this does not go far enough, the RRC argues, pointing out that a £110 rent rise is an increase of 7.9 per cent on the average rent, close to the current average rent increase of 7.5 per cent. This means it is unlikely that tribunals will be able to provide adequate protection against 'backdoor eviction' via rent rises, which the Ministry of Housing, Communities and Local Government says they should do. Furthermore, research by the group finds that the average decision made by tribunals in the first half of 2025 saw tenants receive a rent increase of more than £240 per month. The polling also reveals the stark impact even a market rate increase can have on renters, following years of consecutive rental market increases during the Covid pandemic and cost of living crisis. Around 85 per cent of renters said they would need to make changes to their spending to afford a rent rise of £110. Of these, 32 per cent said they could cut back on non-essential spending, while 24 per cent said they would need to cut back on essentials. A further 14 per cent said they would be forced to use savings or borrow money, and 13 per cent said they would have no way of affording the rise. Only 14 per cent of renters said they would be able to afford the increase with no changes to their spending. Average rents increased to £1,339 in May, up 7 per cent in the year. This is up nearly 30 per cent from when rents began to rise for years prior to 2021, up nearly 30 per cent from £1,034. This figure is more than four times the 7 per cent rise in the four years from May 2016 to May 2021, with the average rent rising from £954. Tom Darling, director at the RRC said the government's Renters' Rights Bill is 'long overdue', adding that it will 'give renters more rights and protections and should help drive up housing standards'. He added: 'But the rent rise eviction loophole is a serious gap in the legislation. Even after section 21 is abolished, our research suggests as many as a third of renters will still face being pushed out of their homes and communities by rent increases, and landlords will be able to use rent hikes they know tenants cannot afford to threaten or intimidate. 'A cap on rent increases would be simple to implement, putting money back into renters' pockets and giving them real long-term security in their homes." A Ministry of Housing, Communities and Local Government spokesperson said: 'Our landmark Renters' Rights Bill will ensure that landlords are only able to increase rents once a year to the market rate, and tenants will be able to challenge unreasonable rent increases through the first-tier Tribunal. 'This will prevent unscrupulous landlords using rent increases as a backdoor means of eviction, while ensuring rents can be increased to a fair rate.'
Time Out
2 hours ago
- Time Out
Here's how the U.S. ranked in work-life balance—and we're honestly not surprised
In 2025, work-life balance isn't just a buzzword, it's a lifeline. With tech burnout, economic pressure and blurred lines between work and home, the question isn't if we need balance—it's where we can actually get it. Remote's Global Life-Work Balance Index, launched in 2023 and updated annually, ranks countries based on how well they support both personal well-being and professional fulfillment. The 2025 edition highlights the growing global divide in how nations treat their workers, and the U.S. isn't looking great. New Zealand tops the list this year, scoring big on paid time off, public happiness, personal safety and a near-top-tier minimum wage. Most of the top ten is dominated by European nations that clearly value downtime as much as uptime. Canada stands alone as the only country in the Americas to rank in the top ten. So how did the U.S. fare? Unfortunately, it ranked second to last at number 59 out of 60 countries. Only Nigeria scored lower. America's overall score is a dismal 31.17. While it gets some credit on the happiness index (probably thanks to its cultural resilience and strong community networks), that's where the good news ends. The U.S. scored painfully low on key factors like minimum wage, sick leave, paid maternity leave and healthcare access—all essential ingredients for a healthy work-life balance. The message is loud and clear: long hours, limited support and high stress aren't signs of a thriving workforce. They're signs of burnout. Whether you love the hustle or live for your weekends, balance isn't optional—it's necessary. If the U.S. wants to climb the ranks, it'll need more than just good vibes. It'll need structural change. Ten best countries for work-life balance New Zealand Ireland Belgium Germany Norway Denmark Canada Australia Spain Finland
The Guardian
3 hours ago
- The Guardian
‘Shock to creative ecology': NSW regional art galleries face funding crisis after state pulls financial support
Three out of four regional public art galleries in New South Wales are facing a funding crisis after the state government pulled its financial support as a result of a massive restructure of its cultural funding arm, Create NSW. Wagga Wagga, Orange, Armidale, Broken Hill and Tamworth are among 18 regional centres in NSW with major public art galleries that will no longer receive four-year funding from the state government, worth between about $70,000 and $200,000 a year. Sign up for the fun stuff with our rundown of must-reads, pop culture and tips for the weekend, every Saturday morning The decision has prompted two of the state's peak arts bodies to call on the government to conduct an urgent review, warning in a letter to NSW arts minister John Graham in June that the defunding would 'devastate our region's creative life' and significantly weaken cultural tourism, which sees about 3.5 million people visiting regional galleries and museums each year. 'Put simply, it is a shock to the creative ecology that we have worked so hard to establish together,' the letter said. Co-signee of the letter, Regional Arts NSW chief executive Dr Tracy Callinan, told Guardian Australia there was a real risk some galleries could close their doors if local councils are unable to pick up the funding shortfalls. 'I've already been on the phone this morning with at least one, and possibly another, that if they're not … funded, they may have to fold,' she said. 'It seems this minister is very busy looking after the 24-hour economy ... there's $100m in this budget just trying to find a venue for a new film studio, but in the process, he has abandoned the small and medium arts sector. 'I suppose there's not that many votes in the regions for Labor.' Co-signee Brett Adlington, chief executive of Museums & Galleries of NSW, said the success rate for regionally based public galleries applying for recurrent funding had now sunk below 18%, well below the overall success rate of 52%. Only three public galleries in regional NSW were successful in the latest funding round. He said many in the arts sector saw the decision as a way of shifting costs on to local government. Many of the 18 galleries affected by the cuts rely on local councils to fund infrastructure and core staffing costs. However, the galleries rely on state government funding to deliver what Adlington described as the 'lifeblood' of regional cultural life, delivering programs to audiences, and providing employment and commissions to artists and arts workers that are locally relevant, including myriad Indigenous cultural projects. Adlington said regional gallery directors had been advised to lodge fresh applications for two-year funding, scheduled for determination in September. 'But what we're hearing is that's probably going to be just as tight, if not tighter, than the last round,' he said. Guardian Australia has sought a response from the minister and Create NSW. The director of the Maitland Regional Art Gallery, Gerry Bobsien, said the state government's rejection of its application for $110k a year for the next four years had been 'devastating'. 'It's something that I can't keep going back to council for,' she said. Sign up to Saved for Later Catch up on the fun stuff with Guardian Australia's culture and lifestyle rundown of pop culture, trends and tips after newsletter promotion 'Funding for these cultural programs, particularly in regional areas, is so critical, and the defunding of it appears to be very widespread, spread throughout regional NSW.' Bobsien has already lodged a last-ditch application for two-year funding. '[We] are sweating on this outcome due in September,' she said. 'This process to turn around and re-apply for two-year funding was very difficult as the feedback we received on our multi-year application [has] made it difficult to try and address any shortcomings – we were informed our application was strong, with no suggestions for improvement.' Dr Lee-Anne Hall, director of the Wagga Wagga Art Gallery and the National Art Glass Gallery, said her institutions were now facing a shortfall of about $95,000 per annum, after being informed in June of their unsuccessful grant applications. 'We will not be closing our doors, we are here in the service of the public,' she said. 'However, here in the Riverina, there will be impacts across the board in terms of equity and access for artists, students and community.' Art galleries in urban centres have also been affected by funding cuts. Mosman Art Gallery and Penrith Regional Gallery are among those rejected for four-year funding, and the future of Darlinghurst's Australian Design Centre, which had been reliant on $200,000 in recurrent state government funding, is now uncertain. In January, it also lost $300,000 in federal government funding. 'If we're not funded, NSW will have the distinction of being the only state in Australia without a craft and design organisation,' the centre's director, Lisa Cahill said, referring to Craft Victoria, South Australia's Jam Factory, Craft + Design Canberra, Brisbane's Artisan, and Design Tasmania. The centre has now issued a public appeal to keep its doors open. The board would make a decision on its future towards the end of the year, Cahill said.
