Australian housing affordability sinks to record low as borrowing costs bite
SYDNEY, Sept. 6, 2026 — Housing affordability in Australia has fallen to its lowest level on record, with a household earning a typical income of
SYDNEY, Sept. 6, 2026 — Housing affordability in Australia has fallen to its lowest level on record, with a household earning a typical income of about A$125,000 able to afford only around one in every 10 homes sold nationwide last financial year.
The latest figures from realestate.com.au show that median-income households could afford just 12% of all homes sold, houses and units combined. Mortgage repayments are now taking the biggest share of household income since 1989. That is the sting. Even with some recent falls in property values, the market remains out of reach for many buyers.
Rates and prices pushed affordability lower
The slide reflects a mix of forces. Stronger home prices last year and recent interest rate rises have more than offset the relief from softer values in some parts of the market.
Realestate.com.au senior economist Angus Moore said affordability remains “challenged” as the central bank has raised borrowing costs and lifted loan repayments. He pointed to three rate increases by the Reserve Bank of Australia in February, March and May, which increased mortgage pressures for households already stretched by high prices.
For buyers, the math is brutal. Fewer homes fit the budget. More income goes to the lender. And the gap between wages and house prices still feels wide.
Supply is the sticking point
Economists say the picture will not improve much without a meaningful rise in housing supply. That warning echoes a broader global problem seen in many advanced economies, where demand has run ahead of new construction and affordability has worsened even after price dips.
The latest Australian data also fits a wider pattern reported by housing researchers and industry groups elsewhere: high costs, tight supply and expensive borrowing continue to squeeze access to homes. In the United States, for example, analysts have pointed to structural shortages and restrictive zoning as key drivers of the crunch. In Australia, the message is similar. Build more homes, or the pressure stays.
For now, buyers face a narrow market and a hard ceiling on what they can pay. The next test will come with any shift in interest rates — or in whether new supply reaches the market fast enough to matter.
