It's Harder to Buy a Home in 2026 Than It Was in 1990
New research shows mortgage repayments claim a larger share of income in every capital city than they did in 1990, even with rates a fraction of 17%.
The comparison gets made often at family gatherings: buying a home was harder when interest rates hit 17%. The sacrifice that generation made was real. But new research published by Property Update suggests the argument deserves a closer look — and that in most respects, today's buyers are facing a harder challenge, not an easier one.
The repayment burden is higher today in every capital city
Primara Research compared average new home loans and repayments against median full-time income in 1990 and 2026. The results show that in every Australian capital city, repayments now represent a larger share of income than they did in 1990, despite mortgage rates sitting at a fraction of their early-1990s levels.
In Sydney, the average new loan has grown roughly tenfold — from $84,594 in 1990 to $841,693 in 2026. In 1990, repayments on that loan represented approximately 61% of median full-time income. In 2026, the comparable figure is 66%. A lower interest rate, a dramatically larger loan, and a net increase in the repayment burden.
The pattern holds across all capitals:
| City | Avg loan 1990 | Income share 1990 | Avg loan 2026 | Income share 2026 | |---|---|---|---|---| | Brisbane | $58,127 | 46% | $751,001 | 59% | | Adelaide | $58,499 | 42% | $671,709 | 57% | | Melbourne | $67,864 | 49% | $664,145 | 54% | | Perth | $59,445 | 43% | $720,012 | 52% | | Canberra | $67,072 | 41% | $665,983 | 51% | | Hobart | $44,527 | 32% | $516,190 | 44% | | Darwin | $52,386 | 34% | $545,470 | 43% |
*Source: Primara Research, as published by Property Update.*
The mathematics are straightforward. A lower interest rate does not mean a cheaper mortgage if the loan itself is dramatically larger. Property Update uses an illustrative comparison: a $100,000 principal-and-interest mortgage at 17% over 30 years costs approximately $1,426 a month in repayments. An $800,000 mortgage at 6% over the same term costs approximately $4,796 a month. These figures are illustrative — incomes and living costs also changed significantly over 36 years — but they demonstrate why a lower rate can coexist with a substantially higher monthly commitment.
The deposit problem comes first
The repayment comparison, significant as it is, actually understates the challenge. Before you can make a single repayment, you need a deposit.
The National Housing Supply and Affordability Council's 2026 report estimates that a median-income household needed 11.2 years to save a 20% deposit as of December 2025. That calculation assumes the household saves 15% of gross income each year. On a $900,000 home — not exceptional in most capital cities — a 20% deposit of $180,000 is required before accounting for stamp duty, legal costs, and a financial buffer.
Accumulating that amount while paying rent is increasingly difficult. The Australian Institute of Health and Welfare has found that rental affordability has deteriorated across most capital cities since 2015, with rental costs growing faster than household incomes. Renters are paying more relative to their income than they were a decade ago — which directly compresses the savings available to build a deposit.
The result is a compounding challenge: save more, for longer, while paying more in rent.
Home ownership rates are declining by generation
The Australian Bureau of Statistics has tracked home ownership by age cohort across successive generations, and the trend is unambiguous. Among Australians aged 25 to 39, home ownership was 66% for Baby Boomers in 1991, 62% for Generation X in 2006, and 55% for Millennials in 2021.
The ABS also found that Baby Boomers aged 25 to 39 in 1991 were three times as likely to own their homes outright as Millennials of the same age in 2021. That statistic carries long-term implications: today's buyers will carry larger debt loads into middle age, with less financial flexibility in retirement than the generation that preceded them.
Different lifestyle choices and later family formation do influence when people buy property, so affordability does not explain every part of the generational gap. Nevertheless, the consistent downward trend across multiple ABS data points reinforces the view that entry to ownership has become structurally harder.
What this means for buyers in 2026
The data is sobering — but it is not a case for giving up. It is a case for being strategic.
First-home buyer schemes and government guarantees can meaningfully reduce the deposit barrier. Explore first-home buyer loan options to understand what's available, including federal government guarantees that allow entry with as little as a 5% deposit without requiring lenders' mortgage insurance. Use the LMI calculator to compare the cost of a smaller deposit now against the time and additional rental expense involved in saving a larger one.
Second, consider starting with a smaller property. A villa unit, townhouse, or established apartment may allow you to build equity sooner, even if it's not the home you eventually want. Getting into the market at any level starts the equity clock running.
Third, borrow from repayments, not from aspiration. Use the repayment calculator to model what a realistic loan looks like at today's rates, and work backwards from repayments you can comfortably sustain — rather than organising your life around the maximum the bank will offer.
Getting into the Australian property market in 2026 is harder than it was for the generation that faced 17% rates. Acknowledging that reality is the starting point for a more useful conversation about what pathways to ownership actually look like today.