Buying a home has become tougher across Australia, but nowhere is the challenge greater than in Sydney.

A recent KPMG report found Sydney has experienced one of the biggest declines in home ownership, as property prices continue to grow faster than wages. For many Australians, especially first-home buyers, saving a deposit and getting into the market is becoming increasingly difficult.

The borrowing figures highlight just how expensive Sydney has become. The average new home loan in New South Wales is around $860,000, compared to approximately $521,000 in Tasmania, the lowest in the country. That’s a difference of almost $340,000 simply based on where you live.

It’s easy to see why many families are holding onto property for longer, with younger generations staying at home for longer, or relying on family support to help them get into the market.

The numbers tell the story.

The 2025 Demographia International Housing Affordability Report ranked Sydney as the second least affordable housing market in the world, with the median home costing 12.9x the median household income. In comparison, a housing market is generally considered affordable when homes cost around three times the median household income.

 So, what’s driving it?

It’s more than just high demand. Years of housing undersupply, strong population growth, rising construction costs, and planning delays have all contributed. Simply put, we’re not building enough homes to keep up with the number of people who want to live in Sydney.

While Sydney is under the greatest pressure today, it’s also a reminder of what’s happening across much of Australia. As demand continues to outpace supply, affordability will remain one of the biggest challenges facing both buyers and renters.