Despite a recent decline in house prices, first home buyers in Australia continue to face significant hurdles when entering the property market. According to , even with reduced property values, a couple earning the average income must allocate over one-third of their combined earnings to mortgage repayments for an entry-level home—well above the 30% mortgage stress threshold.
The report paints a somewhat optimistic picture, suggesting that falling prices, rising savings interest rates, and wage growth have created a “time machine” effect, allowing buyers to save for a deposit more quickly. Nicola Powell, Domain’s Chief of Research and Economics, notes that these factors have shortened the time needed to save for a deposit by six months for houses and two months for units.
However, the reality remains complex. While saving for a deposit may be easier, managing repayments is still a major challenge. The report reveals that couples aged 25–34 would need to spend an average of 37.4% of their income on mortgage repayments for an entry-level house. In Sydney, that figure spikes to 50.9%, followed by 45.3% in Canberra and 42.1% in Melbourne.
The report acknowledges that “This is well above the 30% threshold” and highlights the substantial effect that interest rate increases can have on mortgage serviceability.These figures underscore the impact of rising interest rates on mortgage serviceability and highlight the ongoing affordability crisis for first home buyers in Australia. For more insights, visit our or explore our to assess your financial readiness.
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