‘50%’: The shocking cost of a new mortgage for Aussie households 

The average Aussie household needs to hand over half of their income to pay off a new mortgage, a new government report says.  

It’s the latest blow to Australian first-home buyers who are trying to get onto the property ladder amid rising home prices and higher living costs.  

And things may be about to get harder for hopeful home buyers, with fresh interest-rate cuts likely to boost home buying activity and fuel greater home-price growth.  

A new report from the federal government-backed National Housing Supply and Affordability Council found 50% of a median household income was needed to meet repayments for new mortgages in December 2024.  

Renters on a median household income were expected to spend a third of their pay to meet rental costs for new leases.  

For aspiring homeowners, the average number of years required to save for a deposit rose to 10.6 years. 

National Housing Supply and Affordability Council chair Susan Lloyd‑Hurwitz said the human cost of this chronic unaffordability was unacceptably high.  

A report has found that 50% of the median household income was needed to meet repayments for new mortgages in December 2024. Picture: Getty

---

“Many households have to make difficult trade‑offs in the face of rising housing costs, including by reducing spending on other essential household items, living further away from places of employment, education and family networks, or living in inappropriate housing,” she said.  

It comes after the latest PropTrack Housing Affordability Index found that a median household income could only afford to purchase just one in seven homes sold across the country last year.  

REA Group executive manager of economics Angus Moore said housing affordability was at its worst level on record.  

“First-home buyers, or renters looking to buy, who often rely on significant borrowing to enter the housing market are facing incredibly stretched affordability,” he said.  

“In this time, income growth has been insufficient to offset rapidly rising home prices and mortgage rates, meaning the typical Australian household can now afford only 14% of all homes sold across the country.” 

Australia’s median home price hit a new record high in April, rising 3.7% year-on-year to reach $805,000, according to the latest PropTrack Home Price Index.  

There has been some relief for mortgage holders since the Reserve Bank cut interest rates twice this year, but rates still remain higher than average.  

Experts have agreed the best way to improve housing affordability and help people get into home ownership was to build more homes quickly.  

Australia is forecast to fall short of its five-year home building target by 262,000 new homes. Picture: Getty 

---

The report found the supply of new housing was near its lowest level in a decade. 

There were 177,000 new dwellings completed in 2024, falling significantly short of underlying demand for housing which was estimated at 223,000 for the same period.  

The council forecasted the country wouldn’t hit the federal government’s Housing Accord target of building 1.2 million new homes during the five years to mid-2029.  

Australia was expected to build 938,000 new homes over the five-year period, falling short by 262,000 dwellings. 

Median home prices in April 2025

Property Council chief executive Mike Zorbas said the report showed the need to increase productivity in the construction sector, simplify planning systems and encourage investment. 

“We have seen the federal and state governments coordinate their efforts on boosting supply, but more must be done,” he said.  

“The least cost answer for indebted states is to modernise our planning systems and put measures in place to boost the proportion of skilled workers coming into the country. 

“We need to bring forward federal environmental approvals and force power and water providers to stop delaying the delivery of new homes, industrial and commercial assets that our communities need as they grow.”