‘Lasting solution to affordability is abundance’

A NEW report has shown that lower-income Australians are being “completely locked out” of the housing market.

THE Urban Development Institute of Australia has called for all housing assistance and affordability policies to be matched by measures that increase the supply of new homes following the release of the realestate.com.au Housing Affordability Report 2026.

The report finds that a median-income Australian household earning approximately $125,000 can afford just 12 per cent of homes sold, the lowest proportion on record and dramatically below the 43 per cent it could afford five years ago.

For lower-income Australians, home ownership is becoming almost unobtainable, the UDIA said.

A household earning $76,000 can afford only two per cent of homes, while mortgage repayments on a median-priced home now consume 35.5 per cent of average household income — the highest proportion since 1989.

UDIA national president Oscar Stanley said the findings demonstrated that Australia could not solve its affordability crisis by helping more buyers compete for the same limited number of homes.

“These figures should stop us in our tracks. A household earning $125,000 can afford only one in eight homes, while lower-income Australians have been almost completely locked out,” Stanley said.

“Helping Australians overcome the deposit hurdle is worthwhile but demand assistance without additional supply simply moves people forward in the queue while making the queue more expensive,” Stanley said.

“The lasting solution to housing affordability is housing abundance. Australia must make it faster, easier and more viable to build the homes people can afford.”

UDIA is calling for a coordinated federal supply response which:

• Links every major first-home buyer or demand-side initiative to measurable additional new housing supply;
• Directs incentives towards purchasing or investing in newly constructed homes;
• Accelerates planning, environmental and utility approvals through binding assessment timeframes;
• Expands investment in enabling infrastructure required to unlock development-ready land;
• Requires housing targets to reflect feasibility, infrastructure capacity and the types of homes households can afford;
• Prevents new regulation, taxation and building standards from being introduced without transparent affordability and supply-impact assessments; and
• Preserves stable investment settings that support rental housing, project presales and construction finance.

The report found affordability deteriorated in every state.

South Australia is now the nation’s least affordable market overall, while Victoria is the most affordable.

However, even in Victoria, a median-income household can afford only 16 per cent of homes sold.

“The fact that Australia’s most affordable state still offers a typical household access to only 16 per cent of homes tells us this is not a localised market problem, it is a national structural failure,” Stanley said.

“We cannot continue adding grants, guarantees and purchasing power at the front of the market while planning delays, infrastructure shortages, taxes and regulation restrict the number of homes coming out the other end.

“The test for every housing policy should be simple: will it result in more homes being completed sooner and at a price Australians can afford?”