For young Australians James Martin and Liz Upcroft, the dream of home ownership is slipping further from reach despite extreme financial sacrifice. The couple, both 28, have slashed their weekly costs by $600 and moved in with family to turbocharge their savings, only to find Sydney's runaway property market moving the goalposts faster than they can save.
The Homebuying Treadmill
James and Liz initially aimed to buy in their dream suburbs of Surry Hills and Darlinghurst in Sydney's inner east. However, they have been priced out and are now looking at Parramatta in the city's west. Their predicament worsened after the Labor government expanded its first-home buyer scheme in late 2025, a move that further accelerated soaring prices.
Domain predicts house prices will surge by 10 per cent in the first half of 2026, meaning they risk being priced out of Parramatta as well. "It feels a little bit like a treadmill," Martin told the Australian Financial Review. "We'll look, and we'll have an idea around, all right we need to save this much money for a deposit, and then we'll check again six months later, and the needle's moved."
A National Shortfall of 426,000 Homes
Their struggle underscores a broader national crisis. Under the Federal Government's ambitious Housing Accord, 1.2 million new homes were meant to be built by 2029. However, Propertybuyer's Australian Property Market Outlook 2026-2030 reveals the nation is forecast to miss that target by a staggering 426,000 homes.
This looming gap is expected to intensify pressure on prices, rents, and affordability. Propertybuyer chief executive Rich Harvey warned the deficit is structural, not cyclical. "Housing scarcity is now baked into the system," he told the Herald Sun. "Migration and household formation continue to run ahead of new construction while capacity constraints are holding back development."
The damning research shows most jurisdictions are behind, with New South Wales accounting for almost half of the shortfall. Victoria is progressing but still projected to fall short, while Queensland faces acute supply stress. The ACT is the only jurisdiction on track, while the Northern Territory and Tasmania face the largest proportional gaps.
Soaring Prices and a Generation Priced Out
Despite cost-of-living pressures, chronic undersupply is forecast to fuel price growth across all capital cities through 2030, with home values tipped to rise up to 30 per cent. By 2030, Sydney's median house price could hit $2.22 million, Melbourne $1.4 million, and Brisbane $1.45 million.
This reality is forcing painful decisions. Brisbane couple Raphael and Kate Tripet left Sydney two years ago, driven out by the soaring cost. Raphael, a software engineer, said owning a freestanding home for their family-of-four in Sydney was simply out of reach. "We couldn't afford the Sydney market unless we were willing to move far away or make major compromises," he told the Daily Mail.
AMP chief economist Shane Oliver said housing affordability had deteriorated from already very poor levels. "This is evident in the ratio of home prices to wages and incomes being at record levels," he noted.
Renters will also bear the brunt as conditions tighten, with vacancy rates in Perth, Brisbane and Adelaide critically low. Some markets have seen weekly rents jump by $50 to $80 over the past year.
Why Can't More Homes Be Built?
A deep dive into the housing outlook identifies the biggest constraints: severe skills shortages in key trades, protracted planning delays, NIMBY opposition, and construction costs that remain 40 per cent above pre-2020 levels.
Harvey stressed that policy announcements alone are insufficient. "This is not simply a matter of will. Australia lacks the labour, the planning pipeline and the project economics to deliver what is required," he said. "Unless policymakers address these bottlenecks, the market will rely on price and rent signals to ration demand, which will hurt younger Australians the most."
There was a glimmer of hope in November when ABS data showed total dwelling approvals jumped 15.2 per cent, powered by a 34 per cent spike in apartment approvals. However, Master Builders chief economist Shane Garrett warned that 195,000 homes were approved over the year to November, well short of the 255,000 annual target needed. "During the Accord's first year, Australia fell 60,000 homes behind schedule," Garrett said.
For couples like James and Liz, the statistics translate into a daily struggle, where even the most stringent sacrifices are no match for a market fundamentally stacked against them.
