First homebuyers are set to face a fresh challenge getting their foot in the property door, with prices tipped to soar by more than $100,000 across several Australian cities.
Fewer than one in five dwellings are within reach of prospective first-time house hunters, according to one report this week.
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And analysis of Westpac forecasts and house price data from Cotality, formerly CoreLogic, shows another steep hurdle is on the horizon for those still saving their deposit.
Dwelling prices in Australia’s most expensive city, Sydney, are tipped to rise five per cent by December and a further eight per cent in 2026.
Should these predictions be realised, the city’s median house price could balloon by $154,000 to $1.68m within 15 months, according to Canstar.
“For those already in the market, that’s welcome news for their equity,” said Sally Tindall, the comparison firm’s data insights director.
“For those still saving, the deposit hurdle is likely to get a whole lot steeper, not to mention the difficulty in clearing a bank’s serviceability test.”
Perth (+$102,250) and Melbourne (+$103,505) are also expected to grow by six figures, taking the Victorian capital’s median house price through the seven-figure ceiling, joining Sydney and Brisbane.
Tindall said Melbourne is “shaping up as the comeback city in 2026”, on the back of potential double-digit price growth of 10 per cent.
Brisbane properties could swell by $93,000, Adelaide $70,000 and Hobart more than $30,000.
The Reserve Bank has slashed the official cash rate three times in 2025, and another cut is predicted before the year is out.
Lower interest rates mean first homebuyers should have increased borrowing power, and decreased monthly repayments.
“Even with interest rates heading south, there’s little relief for house hunters if prices keep climbing at this pace,” Tindall said.
“The extra borrowing power from lower rates risks being swallowed whole by rising price tags.”
While cautioning that the forecasts can “change course when the data shifts”, Tindall said there was a danger that Australians will “borrow to the limit, banking on prices continuing to climb”.
“If circumstances change — whether that’s interest rates, job security or the economy — it could leave some households overexposed,” she said.
It comes after a First Home Buyer Report from PropTrack and Commonwealth Bank found that a typical first homebuyer could only afford mortgage repayments on 17 per cent of dwellings in Australia, “the lowest on our records since 1995”.
Most first homebuyers are now entering the market with a deposit of less than 20 per cent, paying extra for lenders mortgage insurance or relying on government programs.
“An average income household would need to save for the equivalent of 5.9 years to save a 20 per cent deposit for a median-priced home,” according to the report.
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