Australia’s New Normal: First Homebuyers Stranded by Soaring Costs

Australia’s housing market has become a fortress, locking out first homebuyers as prices soar past $1 million, according to the Australian Bureau of Statistics (ABS). Skyrocketing costs, stagnant wages, and a chronic shortage of homes have redefined the “new normal,” leaving young Australians struggling to achieve the dream of homeownership. As affordability plummets, government policies fall short, and families like Nick Muldoon’s fear they’ll never break into the market.

The ABS reported in June 2025 that the national mean home price hit $1,002,500, driven by surges in Western Australia, Queensland, and South Australia. CoreLogic’s Tim Lawless noted a 6.55% year-on-year rise in median dwelling values to $815,912 by February 2025, far outpacing wage growth. For a $977,000 home, a 20% deposit demands nearly $200,000, a near-impossible sum for many, as Pearler’s analysis highlights. Nick Muldoon, a 37-year-old Brisbane resident, told ABC News, “The goalposts keep moving further away,” as he and his partner delay starting a family, unable to afford a home despite saving diligently.

The rental crisis compounds the issue, with CoreLogic reporting a 29.3% rent increase since August 2020, pushing many to “rentvest” or relocate regionally. Finder’s 2025 First Home Buyer Report reveals 70% of buyers purchase with less than a 20% deposit, risking financial strain. One in seven first homebuyers has no savings left post-purchase, with 45% regretting their decision due to market pressures. The Labor government’s promises, like the Help to Buy scheme, have been criticized for inflating demand without addressing supply, as SQM Research’s Louis Christopher warned of potential 15% price spikes.

This crisis isn’t just financial—it’s a betrayal of aspiration. Young Australians face a system where homeownership, once a cornerstone of stability, feels like a privilege for the wealthy. The government’s focus on grants and low-deposit schemes fuels competition, not solutions. Without bold action to boost housing supply and curb speculative investment, the “new normal” risks leaving a generation behind, locked out of the Australian dream.