The latest Cotality housing affordability report also shows the national dwelling value-to-income ratio reached 8.2 in September 2025, compared with a 20-year average of 6.8. It now takes 11 years to save a 20 per cent deposit, and 45 per cent of gross household income is required to service a new mortgage.
Ray White Group chief economist Nerida Conisbee said home ownership rates were declining, particularly among younger Australians, and affordability pressures were a clear driver of that trend.
“Elevated price-to-income ratios point to increasing structural barriers to entry. Yet the market continues to transact,” she said.
“Prices remain resilient and first home buyers are still active.
“The issue is not that affordability has improved, but that access has become more conditional. Price-to-income ratios highlight the pressure, but they do not explain how participation is being sustained.”
The latest Domain data shows the average WA first homebuyer couple aged 25 to 34 will take five years and four months to save a 20 per cent deposit for an entry-level home in Perth.
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The same couple would spend 42 per cent of their income on mortgage repayments for that home.
Conisbee said first home buyers were not typically purchasing the median dwelling.
“They are buying in the lower half of the price distribution. As affordability pressures increase, they shift further down that spectrum,” she said.
“This is visible in the sales data. Over the past decade, the number of houses sold nationally under $750,000 has fallen sharply, declining from around 248,000 in 2015 to roughly 153,000 in 2025.
“Entry-level detached housing has contracted significantly. In contrast, unit sales under $750,000 have held up more strongly, rising from approximately 77,000 in 2015 to close to 96,000 in 2025.”
