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Declining Housing Affordability Amid Increased First-Home Buyer Demand

Understanding the Financial Strain on Australian Families

Declining Housing Affordability Amid Increased First-Home Buyer Demand?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The Real Estate Institute of Australia (REIA) has released a report indicating a decline in housing affordability during the December 2025 quarter.
The expansion of the 5% deposit scheme has led to a surge in first-home buyer activity, resulting in higher average loan sizes and increased financial strain on households.

According to the REIA's Housing Affordability Report, average home loan repayments now account for 49.2% of median family income, marking a 2.2 percentage point deterioration over the quarter. This trend suggests that, despite the scheme's intention to facilitate homeownership, it has also contributed to larger loan amounts and higher repayment burdens.

For first-home buyers, this means that while the initial barrier to entry may be lower due to the reduced deposit requirement, the ongoing financial commitment is substantial. Prospective buyers should carefully assess their financial capacity, considering not only the deposit but also the long-term implications of larger loan repayments on their household budgets.

In light of these developments, it's crucial for first-home buyers to explore various financing options, seek professional financial advice, and develop comprehensive budgeting plans to ensure sustainable homeownership.

Published:Friday, 1st May 2026
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

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Knowledgebase
Debt-to-Income Ratio (DTI):
A personal finance measure that compares an individual's monthly debt payment to their monthly gross income.