Domain has released its 2026 report about first home buyers, and the results are a reality check for most Aussies looking to make their debut in the ever-elusive housing market.
Published earlier today, the annual report looked into the prices of entry-level homes and units in capital cities. In other words, the bracket and type of property most sought-after among first home buyers.
It found, rather dishearteningly, that prices within that bracket have grown even further out of reach for most first home buyers over the past year, despite lowered interest rates and a raft of government incentives aimed at those hoping to enter the market for the first time.
Prices of entry-level homes and units have increased
Getting down to brass tacks (clutch your wallets!), the report found entry-level prices have grown in every capital city except Melbourne. Entry-level homes in Sydney are the highest, sitting at around $1.15 million for homes and at $645,000 for units — an increase for both compared to last year’s report.
While the figures might come as little surprise given Sydney’s notorious market, other capital cities are not far behind. Brisbane, Adelaide and Perth, once thought of as the go-to for housing affordability, each recorded higher entry-level prices than last year.
Entry-level homes in those cities range from $720,000 in Adelaide to $856,000 in Brisbane.
“This is a vast change in affordability that ultimately comes down to entry pricing,” Dr Nicola Powell, Domain’s Chief of Research and Economics, told PEDESTRIAN.TV.
“What we’ve seen pretty much across all of our capital cities is strong rates of entry price growth both for houses and for units.”
Saving times have lengthened
Naturally, the notable entry-level price jumps have lengthened the time it takes for buyers to save for the first home, which is another metric examined in the report.
Hate to be the bearer of more bad news, but these stats are equally grim, with Domain finding that the time taken to save up for a 20 per cent deposit has increased in every state.
That average time ranges between capital cities, with first home buyers in Darwin needing to save for over two years and Sydneysiders saving for over seven years to nab an entry-level home.
“That means it takes [first home buyers] longer to save for that deposit, so it’s kicking that goalpost of saving further and further down the road,” Powell said.
“Pretty much every single city has seen the journey to home ownership lengthen. That savings time is taking longer.”
But what about all those first home buyer incentives?
Counterintuitively, the increase in prices and saving time comes even after the government’s recently-expanded five per cent deposit scheme, which attempts to move the savings goalpost closer but doesn’t address the issue of entry-level housing supply.
“The scheme supercharges your market access by allowing you to purchase much quicker, but it isn’t tied to supply. So you’ve got all of these first home buyers concentrated at the lower end of the housing market, which supports price growth,” Powell said.
“What you really need to do for smart policy is have an incentive that helps demand and helps first home buyers that is also tied to supply.”
So should we abandon all hope?
The short answer is maybe not. The report indicated that housing affordability is uneven across the country, meaning there are some pockets where the dream of a white picket fence is more reachable than others.
Powell also said the other avenue of reaching the goalpost, the Bank of Mum and Dad, is becoming increasingly popular. That’s great if your parents have the means, but it can also “create a growing divide between the haves and have-nots” and is dependent on different families and their previous property ownership, income or access to financial support.
For all its doom and gloom, the report did outline some silver linings. Melburnians can save for units a year faster than in previous reports, and it is the only city where wage growth has surpassed the growth in entry home prices over the last five years.
Canberra, meanwhile, is the only city where unit prices actually fell over the past year.
“My core advice for anyone is to not give up. I really believe that the Australian dream runs strong. There are many incentives out there at the state and federal level. Educate yourself on what those incentives are and see if you are eligible for any of them,” Powell advised.
If all else fails, perhaps it’s time we brush up on squatters rights, or retreat back to our childhood bedrooms, Justin Bieber posters and all.
Lead images: Getty Images and HBO
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