Australia’s property market has hit another disappointing low after new data revealed an average couple cannot afford to buy an entry-level house in any city – forcing many to ‘give up’ completely with more interest rate hikes on the horizon.

Entry house prices have increased drastically across the country, rapidly outpacing wage growth, in a major change from five years ago when only Sydney was the only city considered unaffordable.

The data, revealed in Domain’s 2026 first home buyer report, showed affordability outcomes have fragmented across cities, with Brisbane, Darwin and Adelaide recording over 20 per cent increases in entry-level house prices, year on year.

Sydney also recorded strong double-digit growth and remains the only capital city where an entry-priced house exceeds $1 million.

‘Australia’s affordability challenge for first-home buyers is now structural. It’s not cyclical… it is not a landscape that anybody can keep up with because we continue to see entry-level prices rise faster than wages, and that divergence is really the core issue,’ Domain’s economics chief Nicola Powell said.

‘In the mid-sized capitals, I think first home buyers are startled when you’re looking at the change now versus five years ago. 

‘Rewind five years ago, Sydney houses were the only major capital city that was technically in mortgage stress. Fast-forward to today, all of our capitals are sitting in mortgage stress for entry houses.

‘We’re creating whole waves of generations that are just not going to be able to purchase a home. 

Entry house prices increased by 68 per cent across Australia in the last five years

Domain’s economics chief Nicola Powell described the data as ‘astounding’

‘For some, it’s a dream that they don’t ever think will become a reality.

‘Purchasing an entry house is pie in the sky for a 25- to 34-year-old … you won’t get that type of mortgage approved,’ she said. 

The new data shows the median entry-level house price in Sydney is $1.15 million, up 64 per cent since 2020, and has more than doubled to $860,000 in Brisbane and $780,000 in Perth. 

In Melbourne, the entry-level price of $720,000 is up by 20 per cent, and in Darwin, it is up by 61 per cent to $656,000.

When purchasing a unit, Brisbane’s entry-level price of $660,000 is now higher than Sydney’s $645,000 – a staggering 81 per cent growth in the capital of the Sunshine State.

Repayments on entry-level houses consume almost half a typical young couple’s income, up by almost 24 per cent in five years and well above the 30 per cent mortgage stress benchmark.

Crucially, those figures are based on dual-income households.

It comes as the Albanese government is facing increasing pressure to do more to help first-time buyers. 

For the first time on record, Brisbane has overtaken Sydney as having the longest time required to save for an entry-priced unit

Former Treasury Secretary, Ken Henry, who led a 2010 review of taxes, has warned the government they must slash the top tax rate to help end the ‘injustice to younger generations of Australians.’

‘Rental property investments are primarily, under Australian tax law, a vehicle for sheltering wage and salary income from tax,’ Dr Henry said at a recent Senate hearing.

‘There is a loss of opportunity there that does great injustice to younger generations of Australians.’

His warning came amid widespread reports the government is considering cutting the capital gains tax discount, which currently stands at 50 per cent. 

It’s understood reducing the CGT discount to 33 per cent for housing investors only, is the preferred option being worked up by the Treasury.

Those with shares and other investments would keep the 50 per cent CGT cut under the proposed plan.

However, the housing-only reforms are likely raise very little revenue, a source told the Australian Financial Review.

Former Treasury Secretary, Ken Henry said he’d like to see a complete overhaul of the tax rules

But if the deduction was cut to 33 per cent for all asset classes, it would raise an estimated $5 billion a year.

On Sunday, asked if he was considering tweaking the discount, Albanese told Sky’s Andrew Clennell: ‘What we’re considering doing is handing down a budget, Andrew, on the second Tuesday in May’. 

‘And what we are doing is tax cuts this July, another tax cut the following July, and when it comes to housing, we’re doing our best to deal with the supply question. That’s our focus.’ 

Negative gearing and CGT tax breaks are helping investors outcompete first-home buyers two-to-one in the housing market, according to new research. 

‘It’s clear the housing market isn’t working for people who just want a place to live,’ ACOSS chief executive Cassandra Goldie said. 

According to the analysis, the average investor mortgage is roughly $100,000 higher than loans taken out by first-home buyers. 

‘First home buyers are lining up at auctions only to be outbid by investors with bigger loans and generous tax breaks behind them,’ Dr Goldie said.

‘These tax breaks are not building affordable homes. They are fuelling competition over existing homes and driving prices further out of reach.’