Maddie has given up on buying a house in Australia, even though she has saved the most money in seven years.

The Melbourne health worker, who asked to be identified only by name, said he underwent 70 inspections and made three offers last year, but was only able to sell his home for more than $100,000 above the asking price.

“Even if I had a really healthy savings account, I would probably have to borrow to the maximum amount that I would be allowed to in order to take on that level of debt because prices have risen so quickly and so significantly.”

The average age at which people buy their first home is rising as wages struggle to keep up with soaring home prices. Statistics compiled by the Australian Institute of Health and Welfare show that the proportion of young people who own their own home is falling.

Maddie, 30, told the ABC she was reluctant to take on such a large amount of debt to pay off her mortgage and had decided to move abroad in the next few years to start a family.

Aging of first home buyers

The number of homeowners between the ages of 25 and 29 is In 1971 it was 50%; in 2021 it will be 36%.

For those aged 30 to 34, it fell from 64 percent to 50 percent over the same 30-year period.

Westpac Bank was the only major bank contacted by ABC News to provide updated statistics on the age of first home buyers across its loan book.

According to Westpac data, the average age of a first home buyer today is 34 years old across the banking network, with one in five first home buyer loans issued last year going to people aged 40 and over.

“If you just think about the last five years or so, the profile of first home buyers has changed quite a bit,” said ANZ economist Madeline Dank.

The Commonwealth Bank’s latest Prop Track report shows that on average it takes households nearly six years to save enough to make a 20% down payment on an average-priced home, but this figure has almost doubled over the past 30 years.

According to the Australian Bureau of Statistics, the average mortgage amount across Australia is $694,000, more than doubling in the past 10 years.

The highest amount was $828,000 in New South Wales, and the lowest was $481,000 in the Northern Territory.

Mr Dank said the expanded First Home Buyer Guarantee scheme – which saw 29,274 properties purchased in September 2025 – allowed more people to enter the market with smaller loans, but did not take into account the amount needed for repairs or mortgage repayments.

“I think that’s an additional barrier. If your income is low, especially in an environment where interest rates have increased significantly in recent years, it becomes even more difficult.”

accommodate political hot potatoes

According to independent economist Saul Eslake, housing is no longer about meeting basic needs, but about accumulating wealth, which he said has distorted the way we view housing within the cost of living framework.

“Surprisingly, the biggest thing in the CPI (consumer price index, the main measure of inflation) is housing costs, and when that goes down, it’s bad and the government should do something about it.

“And if the CPI goes up, that’s cause for celebration, but everything else in the CPI is treated in the opposite way.”

Mr Eslake argued that despite both major political parties fighting together in the last election, politicians were not taking the housing crisis seriously. Propose policies to increase housing prices.

“This actually tells you why we have a problem. Even though politicians from all walks of life are crying crocodile tears because of the difficulties faced by would-be first home buyers, they know that in any given year… there are only about 110,000 to 150,000 homebuyers.”

The expansion of the First Home Buyer Guarantee increased the price of affordable housing in both metropolitan and regional cities.

New data from Kotality shows that homes below the price limit increased by 3.6% in the December quarter, while homes above the price limit increased by 2.4%.

Eslake said that to win a majority of votes on housing policy, politicians are looking at policies that are already on the market.

“At any given time, there are 11 million Australians who own their own home and 2.5 million Australians who own at least one investment property.

As someone who has been trying to enter the market, Maddie is concerned about the long-term impact the current housing market will have on Australia.

“I don’t want to say housing is a dream…I think it’s a bare minimum for people to be able to afford their own home.

Predictions for 2026

Economists are bracing for higher house prices this year after home price increases slowed in December. Monthly increase rate is the lowest in the past 5 months, It rose by 0.7%.

Of these, the property markets in Sydney and Melbourne fell by 0.1% in December for the first time since January last year.

Predictions about interest rate cuts have also changed.

“The rhetoric around the RBA’s future direction has shifted from the possibility of further rate cuts to the possibility of an actual rate hike in 2026, and I think that’s permeating sentiment in the housing market,” Madeleine Dank said.

“Given changing expectations around interest rates, we expect investor activity may be slightly slower this year compared to last year,” he said.

Saul Eslake says Australia’s housing crisis has become so severe that advice for young people has become almost a joke.

“I don’t want to seem like a joke, but I say that in a sarcastic way because I think it’s a terrible situation where it seems like the most obvious solution.

To solve that, he says Australia has three options.

“One is that a significant proportion of people who already own a home are sufficiently altruistically concerned about the possibility that their children and grandchildren will become homeowners that they are willing to vote for policies that stop home price inflation.

“The second is if enough people in the same group are tired of having to be mom and dad’s bank.

“Or thirdly, the same group of people are fed up with 25 or 35 or more children still living in the home.”