The Cotality report has found 2025 marks record highs in three out of four key affordability metrics:
- home price-to-income ratio
- years needed to save a 20% deposit
- share of income needed for rent
The report found affordability has deteriorated most sharply for houses, with Australia's median house value now 8.9 times the median income.
That's up from 6.6 times five years ago.
Saving for a standard 20% house deposit now takes almost 12 years nationally while the share of income needed to pay a home loan has nearly doubled over five years.
But that's down from earlier record highs, thanks to the drop in interest rates in 2025.
'Cheap' options drying up
While less affected, units have also seen their affordability erode, with the gap between house and unit rents also narrowing.
Regional markets, once seen as offering lower-cost housing, have also seen their affordability converge with capital cities', driven by remote work and sustained regional migration levels.
Sydney remains the most expensive and unaffordable city, while affordability has severely deteriorated across Adelaide, Brisbane, and Perth.
Conversely, Canberra, Hobart, Melbourne, and the Northern Territory have seen some improvement in affordability.
Here's a snapshot of housing affordability data, as of September 2025:
| Median household income (annual, pre-tax) | $104,390 |
| Median dwelling value | $860,529 |
| Median weekly rent | $671 |
| Dwelling value to income ratio | 8.2 |
| Portion of income required to service a new mortgage | 45% |
| Years to save a 20% deposit | 11 |
| Portion of income required to pay rent | 33.4% |
Source: Cotality, ANU
Pandemic effect
Australian home values have jumped by 47.3% since March 2020 with the report identifying a series of demand drivers coupled with supply constraints creating a boom in both home values and rents.
In the five-and-a-half years since the pandemic, the median pre-tax household income has increased 20%, outstripped by a 53.5% jump in both the median dwelling value and median rents.
The time taken to save a 20% deposit has risen to a record 11 years, up from 10.6 a year ago.
The portion of income needed to pay a mortgage - at 45% - was the only metric to have seen some improvement in 2025, down from 47.1% before three cash rate cuts took effect.
That's well above the 20-year average of just over a third of income to service a mortgage.
The portion of income to service rent is currently at a record 33.4%, also up from a 20-year average of 29.2%.
City-by-city guide
Despite affordability metrics being below record highs in Sydney, it remains the most unaffordable market of the capital cities.
It's followed by Adelaide where home values have skyrocketed 77.2% in the five years to September while median household income lifted 20% over the same period.
The time taken to save a 20% deposit in Adelaide cracked a record 12.3 years, more than double five years ago.
Brisbane is the third-least affordable city for housing with Queensland continuing to see the highest level of net interstate migration, pushing home values almost 80% higher over the past five years.
But it was Perth that's recorded the highest growth in home values (83.9%) over the past five years and the biggest decline in affordability of the capital cities.
Despite this, it remains middle of the pack in housing affordability at fourth of the eight state capitals.
Where affordability has improved
Hobart, the second-least affordable housing market in 2022, has seen improvement in its home affordability metrics and is currently regarded as the most 'discounted' of the capital cities relative to its peaks.
This is largely driven by weak population growth and the pressure of higher interest rates since 2022.
Melbourne remains at the more affordable end of the state capitals although the report says the city's metrics are showing signs of picking up again in 2025.
Canberra is the second most affordable city, thanks largely to its higher median income levels and lower-priced unit stock.
Along with Tasmania and Victoria, Canberra has also seen weak population growth trends, particularly from an interstate perspective.
Darwin remains Australia's most affordable capital city to buy in, with city the only one to require less than 30% of income to service a new mortgage.
This is despite a rapid escalation in Darwin's property prices in 2025.
Capital cities (least affordable to most affordable)
- Sydney
- Adelaide
- Brisbane
- Perth
- Hobart
- Melbourne
- Canberra
- Darwin
(Calculated according to local affordability metrics)
Rental affordability struggles
Regional Queensland has recorded the highest portion of income to service rent (39%) of all markets in Australia.
Rents at the lower quartile of the market are as much as 61.6% of the median income of the same quartile, the report found.
Of the capital cities, Adelaide remains the least affordable with 35.5% of income to service median weekly rent.
The ACT is a notable exception to worsening rental affordability nationally, partly due to increasing apartment building over the past decade and continuing weak population growth.
'Getting into the market' key
The report found home ownership has become increasingly detached from median incomes in Australia.
First homebuyers trying to save a 20% deposit are at a distinct disadvantage to homeowners purchasing another owner-occupied property, with about 65% of existing homeowners having deposits greater than 20% when they re-purchase.
Data suggests capital gains made on owner-occupier properties tend to be reinvested back into the housing market, creating an even larger gap of access for those who don't already own a home.
The report said when median household income is not enough to buy a median-price home, buyers may increasingly turn to cheaper housing stock, explaining why lower-value markets have shown the strongest growth in recent years.
The report concludes the experience of regional Australia, the mid-sized capitals, and more recently Darwin demonstrates rising prices create a spillover in demand for cheaper markets, spreading affordability challenges further afield.
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