Young Australians Struggle to Achieve Homeownership Dream Amidst Soaring Prices

The first seven years of Free Sobolewski's life were contained within the walls of a one-room besser-block home in rural New South Wales.

A makeshift curtain, strung across part of the room, was all that separated the bunk bed she shared with her sister from the rest of the home.

The bathroom, set in a completely different concrete building, did triple duty as a laundry, toilet and shower, complete with children's clam shell pool underneath as a makeshift tub.

It was rustic, but never permanent.

Within those four walls lived her mum, dad, her sister, and a pledge: if you work hard, and save even harder, the reward one day will be a piece of the world to call your own.

Her parents soon made good on the promise. Through a combination of loans, dual incomes and a small inheritance they were able to buy a five bedroom home in the Brisbane suburb of Bellbowrie in 2008.

Free remembers the first night in that home. She was nine years old, sitting cross-legged on the bare dining-room floor, rolling a softball back and forth with her sister.

The sound of the ball traced loops across the polished hardwood, echoing off empty walls.

"I realised then that this was actually achievable, and I wanted that," she said.

She asked her parents to open her a savings account and she filled it with every cent she earned: from childhood chores to pocket money, paying off her maths degree and eventually a securing a lucrative job with a mining company.

By 27, Free had saved nearly around $285,000.

In an earlier age, this would be enough for a comfortable home, with change. Not anymore.

Homes she'd made offers on would reappear the following week, listed for rent. Others were bought by investors and marked for demolition.

The math she had studied so rigorously no longer applied to her reality.

"When I was a kid I was promised that if I did well in school, went to university, chose my degree wisely, got a good job, and saved my money, I'd have a home by now," she said.

To a young, single woman trying to carve out a life near her job and family, the market felt less competitive than purely hostile.

The equation from effort to reward was clouded.

The great Australian dream

Australia's housing market has been less a roller coaster than a single, uninterrupted ascent for people like Ms Sobolewski.

House prices have surged by more than 400 per cent since 2000, rising about 8 per cent per year. The average home, once priced around $210,000, now comfortably clears $1 million.

The latest forecasts have prices dipping between five and 10 per cent, the steepest fall taking prices back to late 2024 levels.

AMP economist My Bui said the forecast downturn's closer to a "market correction" than a true easing, a term that opened its own political can of worms last month.

For housing to be deemed affordable again, Ms Bui said, something bigger would have to give.

"House prices would need to fall by significant amounts, about 45 per cent … for someone on an average income to match the median home price," she said.

Ms Bui's answer to the "million-dollar affordability question" isn't falling prices, it's rising wages.

Public policy think tank Grattan Institute is on the same page.

Its chief executive, Dr Aruna Sathanapally, said Australia needs an economic trajectory where incomes outpace property growth, alongside planning overhauls to build "gentle density" in places where people actually want to live.

She said Australia also needs a fundamental cultural shift in how property is viewed.

"A housing conversation that fixates on housing as a source of growing wealth and as an asset really is quite peculiar to how you would view a housing system in many parts of the world," she said.

Movin' to the country

For decades the anecdotal antidote to urban unaffordability was to head to the regions.

The pandemic fast-tracked internal migration through improvements to remote work capabilities. But that geographic fiscal advantage is gone.

Housing economist Eliza Owen told the ABC in May that regional advantage had disappeared.

"The result [of pandemic-era migration] was that regional Australia has now become just as unaffordable as the capital cities."

According to the latest Cotality figures the dwelling-value-to-income ratio in regional Australia is 8.4.

In metropolitan areas the same value is 8.5.

"That means if you're on the median income as a household and you're buying the median price dwelling in regional Australia, you'd be spending 8.4 times your gross household incomes to buy that dwelling, whereas in the capitals it's 8.5 times," said Cotality research director Tim Lawless.

But that ratio improves as you look beyond commutable areas, he said, especially to regions with resource-rich job prospects like mining or military towns.

A game of compromise

Before things got easier for Free Sobolewski they got harder.

The 27-year-old went to inspections weekly, making more than 20 rejected offers during a 12-month period.

As prices outpaced her ability to save, her search radius bled outward. Twenty kilometres from central Brisbane became 25. Twenty-five became 30.

The options morphed from standard homes to structural gambles. Eventually, she was squeezed out of the city entirely.

After what felt like an endless cycle of inspection and rejection, she had an offer accepted on a property in Redbank Plains, 35 kilometres from the city.

It's further out than she'd like and more expensive than she wanted.

Some days the wind carries the smell of industrial waste from a suburb over. The nearest road hums with traffic.

"Where are young Australians supposed to go now," she said.

It's not the home she dreamed of when rolling a softball in an empty dining room in Bellbowrie. But it's hers, and for that she's grateful. Even if it's been anything but easy.

Since signing her mortgage, the Reserve Bank has lifted interest rates four times — three of which happened before she moved into the home.

Her interest rate has climbed from 5.3 to 6.18 per cent, pushing her monthly repayments from $3,800 to more than $4,200.

Today, around half of her take-home income goes straight to the bank.

She's cut down where she can and relies heavily on an offset account while living as frugally as possible, dancing on that economic razor's edge.

But the reward is a sense of freedom from the anxiety of a landlord's eviction notice. She stands on dirt that she owns. Or, as she dryly corrects, dirt the bank owns most of.

"I didn't buy my house as an investment," Ms Sobolewski said.

If the current decline turns into a freefall, she knows the risk. She's done the sums. But she won't begrudge the beneficiaries.

For now, she retreats to her garden to tend to her veggie box on land that is securely hers. But she remains fiercely worried about those still locked outside the gates.

"At the end of the day it's not just about my mortgage. It's about whether young Australians who work hard, save responsibly, and do what they're told they're supposed to do can still realistically hope to own a home," she said.

"And right now I think that dream is slipping further away than it has in decades."