Australia’s Property Market is Growing — But So Is the Buyer Gap
By Alan Weiss | Weiss Real Estate
Australia’s property market has long been a symbol of aspiration and wealth-building. But as 2025 unfolds, a harder question is taking centre stage: who can realistically afford to buy property today — and who is being locked out?
With the median house price now sitting at $1.17 million nationally, and unit prices averaging around $667,000, the gap between property values and the average income has widened dramatically. Today, the average full-time worker earns just over $102,700 a year. Based on traditional lending criteria, that income only stretches borrowing capacity to around $600,000–$650,000 — well short of what’s needed to buy even an average home in most metropolitan areas.
While headlines often focus on how many new dwellings are needed to match Australia’s surging population, the deeper issue is affordability. It’s one thing to build more homes. It’s another for the average Australian to be able to afford them.
At a practical level, dual-income households have become the norm for buyers entering the capital city markets. Without two salaries, saving a deposit and qualifying for a sufficient mortgage is almost impossible. Buyers with above-average incomes — especially professionals earning well above $150,000 combined — still have strong purchasing power. Many younger buyers, however, are increasingly relying on family assistance, with the so-called “Bank of Mum and Dad” now ranked as one of the biggest sources of first-home buyer funding in the country.
Even then, the hidden costs of buying can catch many off guard. In New South Wales, stamp duty alone on a median-priced home adds approximately $47,500 to the upfront costs. Add in legal fees, pest and building inspections, mortgage insurance, and moving expenses, and buyers often need well over $150,000–$180,000 in cash to secure a typical property.
This reality has forced many first-time buyers to either compromise on location and property type or delay their purchase altogether. Some are choosing to “rentvest” — buying in more affordable areas while continuing to rent in their preferred locations — while others have been completely priced out for now.
Investors face a different equation. While national rental yields have risen to an average of 5.04%, investors buying into blue-chip markets like Sydney’s Eastern Suburbs face much lower rental returns — often around 2.5%–3.5%. In these prestige areas, the investment case leans heavily on long-term capital growth rather than immediate rental income. Gross yields may be lower, but the strength of land value, scarcity of stock, and ongoing demand continue to underpin property prices, making it a strategic play for those with a longer investment horizon.
Meanwhile, affordability metrics continue to shift. Only around 14% of properties sold today are affordable to a median-income household, a dramatic decline compared to even five years ago. For lower-income Australians, the situation is even starker, with just 3% of homes falling within reach.
Looking ahead to 2033, the situation could become even more challenging unless incomes rise substantially, or significant reforms are introduced to improve affordability. With Australia’s population expected to top 30 million within the next eight years, the demand for housing will only intensify. But unless there is equal attention paid to affordability, a growing number of Australians will find themselves permanent renters, unable to bridge the gap to homeownership.
In today’s environment, real estate success — whether buying a first home, upgrading, or investing — isn’t about luck. It requires sharp planning, financial discipline, and a clear strategy tailored to the market’s realities.
At Weiss Real Estate, we work with clients to navigate this complex environment — Because today, more than ever, buying smart matters.
