Over the past five years, entry-level house prices have surged by 68%, while units have seen a 30% increase. In contrast, wages have only risen by 21% during the same period. This disparity has made it increasingly challenging for first-time buyers to accumulate the necessary deposit, even with the assistance of programs like the 5% Deposit Scheme and the Help to Buy Scheme.
In Sydney, the situation is particularly acute, with couples needing to allocate 61.8% of their income to service a mortgage on an entry-level house. Other cities, including Brisbane, Adelaide, and Perth, are also experiencing rapid growth in entry-level prices, narrowing the affordability gap between them and traditionally more expensive markets.
Nicola Powell, Domain's chief of research and economics, emphasized that the affordability crisis is no longer confined to Sydney. The rapid price increases in other capitals are making homeownership increasingly unattainable for many young Australians.
To address these challenges, experts suggest a multifaceted approach. Stamp duty reform and incentives to increase the supply of affordable housing are among the measures proposed to help young Australians enter the real estate market. Additionally, enhancing financial literacy and providing comprehensive guidance on navigating the home buying process can empower first-time buyers to make informed decisions.
In conclusion, while government schemes have provided some relief, the overarching issue of affordability remains a significant hurdle for first home buyers. A concerted effort involving policy reform, increased housing supply, and buyer education is essential to make homeownership a realistic goal for more Australians.
