The Great Australian Housing Affordability Crisis
How buying a home went from a few years' savings to a lifetime commitment
$970,000
National Median Price
8.8x
Price-to-Income Ratio
was 3.4x in 1980
1.8 yrs
Years to Save Deposit
was 0.7 yrs in 1980
53%
Income on Repayments
was 29% in 1980
The Price Explosion
Median house prices by capital city, 1980 to 2025. Sydney has gone from $65k to $1.65 million.
Note: nominal prices. Inflation-adjusted, real prices have still risen roughly 4-5x since 1980.
Prices Outpaced Wages by 2.5x
Both indexed to 100 in 1980. National house prices rose over 20x while average full-time incomes rose about 8x.
The Deposit Hurdle
Years of gross income needed to save a 20% deposit, by city. Compare 1985 (green) vs 2025 (coloured).
Mortgage Stress
Monthly mortgage repayment on an 80% LVR, 30-year loan as a percentage of gross annual income. Above 30% is considered mortgage stress.
Interest Rate History
Standard variable mortgage rate, 1980 to 2025. The 1990 peak of 17% crushed borrowers; today's 6.39% still hurts at current prices.
City Comparison — 2025
| City | Median Price | Price / Income | Years to Deposit | Monthly Repayment | % of Income |
|---|
| Sydney | $1,650,000 | 15.0x | 3.0 yrs | $8,248 | 90% |
| Melbourne | $950,000 | 8.6x | 1.7 yrs | $4,749 | 52% |
| Brisbane | $880,000 | 8.0x | 1.6 yrs | $4,399 | 48% |
| Perth | $760,000 | 6.9x | 1.4 yrs | $3,799 | 41% |
| Adelaide | $750,000 | 6.8x | 1.4 yrs | $3,749 | 41% |
1985 vs 2025 — Side by Side
The same dream, a completely different reality.
1985
Average house price $86k
Average income $20k
20% deposit needed $17k
Years income for deposit 0.9 yrs
Interest rate 13.5%
Repayment % of income 47%
2025
Average house price $970k
Average income $110k
20% deposit needed $194k
Years income for deposit 1.8 yrs
Interest rate 6.39%
Repayment % of income 53%
Generational Impact
Boomers
Bought in the 1980s
3x income
Paid off in ~15 years on a single income. Home ownership was the default.
Gen X
Bought in the 2000s
5x income
Dual income increasingly required. Longer mortgage terms became normal.
Millennials
Buying now
9x income
30-year mortgage + dual income + family help or inheritance often needed to enter the market.
Gen Z
Projected
50%+
Projected to spend over half of income on housing costs if current trends continue.