A new Domain report shows owning a home is "slipping further out of reach" for young Australians who are facing uneven affordability pressures.
The report found long periods of relatively low interest rates had effectively boosted property values around the country.
See also: Mean dwelling price up another $14,000
This, in turn, has lifted deposit requirements which the report identified as the biggest hurdle for first home buyers.
A median-income household now needs more than eight years to save a 20% home deposit - up from six years in the early 2000s.
Mortgage repayment noose
Beyond the deposit hurdle, buyers also face much higher mortgage repayments than in the past.
A typical new loan now consumes around 54% of household disposable income - the highest rate in at least 20 years.
The graph below shows the rate skyrocketing from 2022 amid a heated property market and rapidly rising interest rates.
The report found while interest rates easing in 2025 has offered some relief, it has been partially offset by continued rises in home prices, particularly at the lower end of the market.
Younger Australians are now far less likely to own a home than in previous generations.
Home ownership rates for under-34s have dropped in every state, led by steep falls in New South Wales and Victoria.
The graph below compares home ownership rates among Australians born between 1947-51 (74-78 year olds) and those born 1987-1991 (34-38 year olds).
'Structural' issues fuel ownership fall
The Domain report identifies key structural drivers:
- Long periods of low interest rates boosted property values, in turn boosting deposit requirements
- Increasing income volatility and insecure work make long-term borrowing riskier
- Later marriage and families having fewer children may have shifted preferences towards renting over home ownership
It also singles out stamp duty as a growing major tax burden for home owners over time.
The report found stamp duty payment brackets had remained largely unchanged in many states until 2019.
As property values escalated, more buyers were pushed into higher tax brackets, increasing their tax burden and adding to the time it takes home buyers to save for purchasing costs.
Increased demand for lower-cost housing
The report also found lower-priced homes have outperformed premium properties in price growth since 2022, particularly in Perth, Brisbane, and Adelaide.
It also noted this period had coincided with the rise of new "affordability-related" search terms with 'dual', 'granny', and 'duplex' breaking into the top 10 property search terms in just a few years.
Reform needed
The report proposes that entry barriers to the housing market can be reduced by:
- Replacing stamp duty with a broad-based land tax to lower upfront costs and improve mobility
- Expanding shared equity and low-deposit housing schemes to help first home buyers bridge the deposit gap
See also: First home guarantee guide
- Reviewing lending standards to strike a balance between financial stability and access to credit
It further proposes broader tax reforms including reviewing:
- The structure of income taxes
See also: Everyday Aussies shoulder record tax burden
- Negative gearing and capital gains tax discounts on investment properties
- The exemption of owner-occupied housing from the age pension assets test
See also: How does the age pension work?
It also acknowledges easing the home affordability crisis will require coordinated, sustained action across all levels of government, alongside industry and the community sector.
Advertisement
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
