Aussie Dream Dashed: No City Affordable for First Home Buyers

An alarming trend has emerged in Australia's property market, with new data indicating that entry-level houses are now unaffordable for the average couple in every capital city. This marks a significant decline in housing accessibility, as entry house prices have rapidly escalated, far outstripping wage growth nationwide. This persistent divergence is creating a structural affordability crisis, impacting younger generations' dreams of homeownership.

Five years ago, only Sydney was considered unaffordable, but now all major capitals face mortgage stress for entry houses. Prices in cities like Brisbane have seen over 20 per cent year-on-year increases. Entry house prices nationwide have surged by 68 per cent in the last five years, with median entry-level house prices in Sydney exceeding $1.15 million and doubling in Brisbane. Repayments on these homes now consume nearly half of a typical young couple's income, well above the 30 per cent mortgage stress benchmark.

The government is facing mounting pressure to address this crisis. Proposals include overhauling tax rules to end the 'injustice to younger generations,' potentially by reducing the capital gains tax discount for housing investors. Critics argue that current tax benefits, such as negative gearing and CGT breaks, enable investors to outbid first-home buyers, thus fueling price increases rather than supporting the development of affordable housing.