REA Group's data business, PropTrack, today launched the annual PropTrack Housing Affordability Report, which showed housing affordability slightly improved over 2025, but remained close to record low levels.
The findings are based on the PropTrack Housing Affordability Index - the most comprehensive measure of housing affordability in Australia - which assesses the share of homes that households across the whole income distribution can afford to purchase.
The report found that higher incomes and lower mortgage rates, following the Reserve Bank's interest rate cuts in February and May, eased affordability in FY25, yet mortgage serviceability and saving a deposit remain key hurdles for buyers.
Key take outs:Nationally, a median-income household, earning about $118,000 a year, could afford just 15% of all homes sold in the 2025 financial year, up from 11% a year prior.
Higher incomes, coupled with lower interest rates following the RBA's rate cuts in February and May, eased borrowing costs and boosted borrowing capacity.
Yet conditions remain challenging, particularly for low-income households at the 30th income percentile, who could afford to buy just 3% of homes sold in the past year.
An average-income household in Australia, saving 20% of their income for a 20% deposit on a median-priced home, would need to save for the equivalent of 5.8 years.
New South Wales and South Australian households face the most challenging affordability in the country.
A median-income household in New South Wales could afford just 11% of homes, while those in South Australia could afford just 10%.
Western Australia remains the most affordable state for median-income households, followed by Victoria.
REA Group Senior Economist Angus Moore said: "The PropTrack Housing Affordability Index shows that nationally, conditions improved modestly in 2025.
"Higher income growth, coupled with lower interest rates following the RBA's cuts in February and May, eased borrowing costs and boosted borrowing capacity.
"But even so, affordability remains near record lows, with conditions particularly challenging in News South Wales and South Australia.
"Since the start of 2025, home prices have risen 7% and are growing consistently around the country. While there's still a chance of another rate cut next year, we aren't likely to see more than that. The three cuts we've already seen in 2025 will continue to support
home price growth, albeit at a slower pace than in recent years given the very challenging level of housing affordability. As a result, affordability will remain challenged in the year ahead."
Additional findings:Borrowing capacity for households increased by an average of 9.8%, enough to offset the increase in home prices between 2023/24 and 2024/25.
An average-income Australian household would need to spend about a third of their income (32.7%) on mortgage repayments to buy a median-priced home, a slight decline from its peak of 34.3% in the June quarter of 2024.
For higher-income households, affordability has improved marginally. Home prices at the more expensive end of the market have not increased by as much as more-affordable homes
More-affordable parts of the market - where lower- and middle-income households are buying - saw faster price growth than at the higher end of the market, meaning affordability has worsened for these buyers.
For the first time since 2021, South Australia eclipsed New South Wales to become the state with the highest deposit burden.
For more information and to view the full report please visit https://www.realestate.com.au/insights or click here.
-ends- For more information:Sophie Flavell
Media & Partnerships Manager M: +61 438 089 165
About REA Group Ltd (https://www.rea-group.com): REA Group Ltd ACN 068 349 066 (ASX:REA) ("REA Group") is a multinational digital advertising business specialising in property. REA Group operates Australia's leading residential and commercial property websites - realestate.com.au and realcommercial.com.au - as well as the leading website dedicated to share property, Flatmates.com.au and property research website, property.com.au. REA Group owns Mortgage Choice Pty Ltd, an Australian mortgage broking franchise group, PropTrack Pty Ltd, a leading provider of property data services, Campaign Agent Pty Ltd, Australia's leading provider in vendor paid advertising finance solutions for the Australian real estate market and Realtair Pty Limited, a digital platform providing end-to-end technology solutions for the real estate transaction process. In Australia, REA Group holds strategic investments in Simpology Pty Ltd, a leading provider of mortgage application and e-lodgement solutions for the broking and lending industries, Arealytics, a provider of commercial real estate information and technology in Australia and Athena Home Loans, a leading digital non-bank lender and one of Australia's fastest growing fintechs. Internationally, REA Group holds a controlling interest in REA India Pte. Ltd. operator of the established brand Housing.com and Planitar Inc., the maker of iGUIDE, a leading 3D tour and interactive floor plan technology headquartered in Canada. REA Group also holds a 20% shareholding in Move, Inc., operator of realtor.com in the US and a minority interest in Easiloan, a technology platform for end-to-end digital processing of home loans in India.
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REA Group Limited published this content on November 28, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on November 27, 2025 at 13:06 UTC.
