The Reserve Bank leaves interest rates on hold at 3.6 per cent.<\/p>\n
The latest official data show total household wealth rose 2.7 per cent, or $470.1 billion, in the three months of the June quarter 2025, driven mainly by increases in property and land values.<\/p>\n
And the higher property prices go, the longer it’s taking many Australians to get over the line for a home loan.<\/p>\n
Waiting for Godot<\/p>\n
In 2017, Sydney buyers needed, on average, 8.2 years to save the $215,133 deposit required to purchase a median-priced house.<\/p>\n
That was three years longer than the national capital city average of 4.9 years.<\/p>\n
Today, it takes a buyer at least 13 years to save for a median-priced house in Sydney, which is well over $1 million.<\/p>\n
This assumes a first-home buyer with an average annual income of $100,000 who saves 15 per cent of their income every year.<\/p>\n
This means that, at a basic level, a family pulling in an “average” combined income two decades ago, who could afford to buy a property, is now destined to rent indefinitely.<\/p>\n
<\/p>\n
The government continues to defend its housing target as “ambitious but achievable”. (
\n ABC News: Peter Drought
\n )<\/p>\n
Is this fair?<\/p>\n
The Reserve Bank governor, Michele Bullock, thinks not.<\/p>\n
During Tuesday’s Reserve Bank interest rates media conference, she remarked, “It’s a very, very difficult situation, David.<\/p>\n
“And as an individual and as a citizen, I think it’s we’re in a very difficult position with the property market and I don’t, I don’t actually think that most reasonable people think that this is a good outcome,” Ms Bullock said.<\/p>\n
Getting the job done<\/p>\n
One solution is to push a wrecking ball through the economy with higher interest rates.<\/p>\n
The resulting increase in unemployment and mortgage repayment defaults could see a significant correction in the property market.<\/p>\n
But it’s an absurd solution.<\/p>\n
A reasonable policy idea, on the other hand, is to significantly increase supply to absorb the increase in the population, especially through migration.<\/p>\n