PropTrack 2026: only 14% of Australian households can afford the median home - what it means for first home buyers
PropTrack's 2026 Housing Affordability Report reveals only 14% of median-income households can now afford the median-priced Australian home, down from 43% in 2023. The price-to-income ratio is 8.2x nationally and it takes 11 years on average to save a 20% deposit. Here is what the data means and what first home buyers can do about it.
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Unpack Property
29 June 20265 min read
In 2023, roughly 43 out of every 100 median-income households in Australia could afford to buy the median-priced home. Today, according to PropTrack's 2026 Housing Affordability Report, that figure has collapsed to just 14. For first home buyers, that single data point captures both the scale of the challenge and why knowing which tools are available to help you has never mattered more.
On this page (4 sections)
What the affordability numbers actually show
PropTrack measures affordability in two ways: how many households can service a mortgage on the median-priced home, and how long it takes to save the deposit to get there. Both readings have deteriorated sharply over the past three years.
14% of median-income households can afford the median-priced home nationally - down from 43% in 2023.
In Sydney that figure is just 10%, meaning nine in ten households on median incomes cannot afford the median Sydney dwelling at current prices and rates.
Australia's national price-to-income ratio is 8.2x. Sydney sits at 10.1x. International housing research classifies any ratio above 5.1x as severely unaffordable.
Mortgage serviceability nationally has reached 45.9% of gross household income, well above the long-run average of 34.3%.
It now takes the average Australian 11 years to save a 20% deposit, with renters spending a record 33.4% of their income on rent in the meantime.
Three RBA rate hikes in early 2026 - taking the cash rate from 3.60% to 4.35% - have amplified a structural affordability problem that has been building for two decades. The causes are not a single policy or event. They are the combination of chronic undersupply, strong population growth through net overseas migration above 300,000 per year, and property prices that have outpaced wage growth for much of the past 20 years.
What is driving the long-run deterioration
The National Housing Supply and Affordability Council's State of the Housing System 2026 report estimates that Australia will deliver approximately 980,000 homes by the June 2029 target date of the National Housing Accord, against a goal of 1.2 million. That gap of more than 200,000 homes means supply will remain constrained even as governments pursue new programs to close it.
The federal budget delivered in May 2026 introduced measures aimed at gradually tilting the market toward owner-occupiers and expanding supply:
Negative gearing restricted on established residential properties purchased from May 12, 2026, effective from July 1, 2027 - expected to reduce investor competition for established homes in the near term.
100,000 homes for first home buyers, backed by $10 billion in federal investment, with construction beginning in the 2026-27 financial year and homes expected to come to market from 2028 onwards.
Help to Buy expanded with higher income and price caps, allowing the government to contribute up to 40% of the purchase price of a new home as a shared equity stake.
These changes are working their way through the system. In the meantime, the affordability numbers remain at record lows and buyers face the market as it is now, not as policy intends it to be by 2028.
What this means for first home buyers right now
The structural challenge is real, but the current package of government support and current market conditions together create a more complex picture than the headline figures suggest. Here is what the data points to for buyers working toward ownership in 2026.
Sydney and Melbourne values are falling. Both cities sit more than 2% below their November 2025 peaks as of June 2026. For buyers targeting those markets, the asking price on specific properties has come down even as the affordability ratio has tightened.
The 5% Deposit Scheme has no places limit and no income cap as of October 2025. Any eligible first home buyer can enter with a 5% deposit and avoid lenders mortgage insurance, which directly reduces the upfront barrier the 11-year saving timeline describes.
Help to Buy is now open in all states and territories.The government can contribute up to 40% of the purchase price on a new build, reducing the loan size significantly and making monthly repayments more manageable at current rates - because a smaller principal means lower repayments even at 4.35%.
FHSS contributions give a tax advantage on deposit savings.Voluntary contributions to super are taxed at 15% rather than your marginal rate. For someone on a 34.5% marginal rate, that gap accelerates how quickly you reach your deposit target compared to saving in a standard account.
State-based grants and stamp duty concessions vary.In the ACT, stamp duty was abolished for all first home buyers from July 1, 2026, with no price cap and no income test - making Canberra one of the most accessible entry points for eligible buyers. Other states have their own concessions worth modelling before committing to a location.
The 14% affordability figure describes the proportion of median-income households who can afford the median home without any assistance. A first home buyer with a 5% deposit, access to the First Home Guarantee, and a relevant state grant sits in a materially different position - because schemes change what you need to bring to the table to make a purchase work. The affordability crisis is a real constraint; it is not an absolute ceiling.
That said, your position will depend on your specific income, savings, location, and which schemes you are eligible for. Working through those numbers precisely - ideally with a mortgage professional who knows the scheme landscape - is the most practical response to a market where the headline data can obscure significant variation at the individual level.
Run the numbers
Use these tools to understand how your specific situation compares to the broader affordability picture:
Borrowing Power Calculator - see what you can borrow at today's rate and how that changes under the August 11 RBA scenarios.
Grant Stacker - model all available grants, schemes, and concessions for your state to see your combined assistance package.
FHSS Calculator - calculate how much faster you can reach your deposit target by saving through super rather than a standard bank account.
Scheme Comparison Tool - compare the 5% Deposit Scheme, Help to Buy, and an unassisted purchase side by side using your own numbers.
This article is general information only. It does not take into account your objectives, financial situation, or needs. Consider seeking independent financial advice before making financial decisions. See our disclaimer for full details.
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