New data exposes brutal reality for NSW first-home buyers

First-home buyers in NSW face the worst housing affordability in 30 years, with the average income household needing nearly seven years to save a deposit for a median price home.

A report by Commonwealth Bank and PropTrack revealed housing affordability for prospective first-home buyers was at its lowest level since 1995, when PropTrack records began. This was despite recent interest rate cuts improving buyers’ borrowing power.

A prospective first-home buyer household aged 25-39, currently renting and earning a typical NSW income of $134,000 a year, would be able to afford just 13 per cent of properties sold over the past year.

This was below the national figure, which showed 17 per cent of homes could be considered affordable for someone on the typical income nationally – about $129,000 a year, the report noted.

The report reveals an average income household in NSW would need 6.9 years to save a 20 per cent deposit for a median-priced home – the second longest wait of all states.

MORE: Sydney engulfed in ‘bidding wars’ as property panic spreads

Sources: PropTrack, ABS. Assumes households saves 20 per cent of average household income, buying a median priced home

Sources: PropTrack, ABS. Assumes households saves 20 per cent of average household income, buying a median priced home

When searching for a location, the report reveals first-home buyers are more likely to look in middle-outer suburbs, and for units or semi-detached homes.

In Sydney, the most-searched areas for first-home buyers were Mount Druitt, Parramatta, Liverpool, Blacktown and Campbelltown – all more-affordable areas located in the west and southwest of the city.

MORE: Sydney house prices shoot up by $66k

Top 10 SA3 regions nationally searched by first-home buyers on realestate.com.au from January 2024 to May 2025.

Consistent with NSW’s relatively challenging affordability, rentvesting among first-home buyers was also reported to be more common in NSW than in other states.

Despite challenging market conditions, there were more first-home buyers in the past year than was typical a decade earlier, indicating buyers were finding non-traditional ways to enter the market.

PropTrack senior economist Angus Moore said in the report that first-home buyers today were taking longer to save deposits than previous generations and had some of the most unaffordable mortgage repayments relative to their incomes.

“Even so, there were more first-home buyers in the past year than was typical during the 2010s, indicating that first-home buyers are finding ways to buy despite these challenges,” he stated.

MORE: Sole Sydney region with falling home prices

PropTrack senior economist Angus Moore

“Taking advantage of government grants, low-deposit schemes, and Lenders Mortgage Insurance can enable first-home buyers to overcome the deposit hurdle and buy sooner.

“Buying newly built or ‘rentvesting’ are also strategies some are implementing to overcome challenging affordability.”

Mr Moore said having flexibility on the location and type of dwelling can also provide opportunity for first-home buyers.

“These buyers typically look at more affordable suburbs, and at apartments, to make the most of their mortgage serviceability,” he said.

“The good news for first-home buyers is that mortgage rates are falling and are currently expected to decrease further across this year.

“While home prices are rising, lower mortgage rates will help put more homes within reach of first-home buyers.”

MORE: City regions where prices grew fastest after rate cuts

The post New data exposes brutal reality for NSW first-home buyers appeared first on realestate.com.au.