First home buyers in 2026 are facing a genuinely strange market. Government support has never been more generous — but in some of the very suburbs that support is designed to help you afford, prices are now rising faster than almost anywhere else. Where you live changes this equation more than almost any other factor. Here’s what buying your first home actually looks like right now in Sydney, Melbourne, and Brisbane, and why looking outside the inner city might be the smartest move you make this year.
The National Picture First
Australia’s median house price across the combined capital cities has crossed $1 million for the first time, while combined regional markets sit notably lower at a median of roughly $751,000. That gap between capital cities and regional Australia is the single biggest lever first home buyers have available to them right now, and it’s worth understanding before looking at any individual city.
Sydney: The Most Expensive, and the Most Unforgiving
Sydney’s entry-level house price now sits at roughly $1.15 million, and the city remains the only Australian capital where even an entry-level house exceeds $1 million. The median dwelling price across all of Sydney sits significantly higher again, with some forecasts pointing toward $1.92 million for the median house by the end of 2026.
For a typical couple aged 25 to 34 buying an entry-level Sydney house without family help, more than 60 percent of household income now goes toward loan repayments — roughly double the share required just five years ago. It now takes the average Australian around 11 years to save a 20 percent deposit, and longer again in Sydney specifically.
The one piece of genuinely good news: the expanded First Home Guarantee scheme has cut close to six years off the typical Sydney deposit-saving timeline for buyers using the 5 percent deposit pathway. But affordability pressure hasn’t disappeared, it’s simply shifted — severe price pressure is pushing buyers further from the city centre, into the outer middle ring and regional centres like the Central Coast and Illawarra, where infrastructure investment and transport upgrades are now driving some of the strongest buyer competition in the entire Sydney market.
Melbourne: The Relative Outlier
Melbourne tells a genuinely different story. The city’s entry-level house price sits at roughly $720,000 — both lower than Sydney and one of the more modest growth stories among the major capitals, up only around 20 percent over five years compared to Sydney’s 64 percent climb over the same period. Melbourne is also the only major capital where unit values have actually edged lower over the past five years, making it one of the more accessible entry points into a capital city market for buyers willing to consider an apartment.
This relative affordability hasn’t gone unnoticed. Melbourne’s softer recent price growth, combined with comparatively resilient rental yields, is increasingly drawing first home buyer attention back to a city that had been somewhat overlooked in favour of Brisbane and Perth over the past few years.
Brisbane: Affordable No Longer
Brisbane’s story has shifted dramatically. Once considered the affordable alternative to Sydney and Melbourne, Brisbane’s entry-level house price has climbed past $860,000, more than doubling since 2020. Brisbane’s entry-level unit price has climbed even further in relative terms, now sitting around $660,000 — slightly above Sydney’s entry-level unit price, after growth of more than 80 percent in just five years.
For buyers purchasing an entry-level Brisbane unit, mortgage repayments now represent close to 39 percent of household income, the highest serviceability burden of any capital city for unit buyers nationally.
Brisbane’s transformation from affordable alternative to genuinely expensive market is one of the most significant shifts in the entire national property landscape over the past five years, driven heavily by interstate migration, relative affordability against Sydney and Melbourne during the earlier part of the cycle, and significant infrastructure investment ahead of the 2032 Olympics.
The Regional Alternative
Across every capital city story, one pattern holds: regional markets remain meaningfully more affordable, and in some cases are now outperforming capital cities on price growth too, with combined regional dwelling values rising faster year-on-year than the combined capitals in recent data. For first home buyers genuinely priced out of capital city entry points, regional centres, particularly those within commuting distance of a capital via major transport corridors, are increasingly where realistic opportunity sits.
What This Means for Your Decision
If you’re flexible on location, the data points toward a clear hierarchy of opportunity right now: Melbourne offers the most accessible entry point among the major capitals, regional centres offer the most affordable option overall, and Brisbane and Sydney both demand either a significantly larger deposit, a unit rather than a house, or a location well outside the inner city to make the numbers work on an average income.
Frequently Asked Questions
Among the major capitals, Melbourne currently offers the most accessible entry-level house price at around $720,000, with more modest price growth than Sydney or Brisbane over the past five years. Regional Australia remains cheaper again, with a combined median dwelling value well below any capital city.
The First Home Guarantee allows eligible first home buyers to purchase with a deposit as low as 5 percent, with the government guaranteeing up to 15 percent of the property value so buyers can avoid paying Lenders Mortgage Insurance. As of late 2025, the scheme became demand-driven with no cap on places, meaning any eligible buyer who meets the income and deposit requirements can access it.
It depends heavily on the city. In Brisbane, units now carry a higher mortgage repayment burden relative to income than houses in some other capitals, while in Melbourne, unit prices have actually fallen slightly over five years, making units a comparatively more accessible entry point there than in Brisbane or Sydney.
For many buyers, yes. Regional markets are meaningfully more affordable than capital cities on average, and several regional centres are now seeing price growth that rivals or exceeds capital city markets, partly driven by buyers being priced out of capital cities and partly by genuine lifestyle and remote work driven demand.
Nationally, it now takes the average Australian around 11 years to save a traditional 20 percent deposit, and longer again in Sydney specifically. Government deposit schemes like the First Home Guarantee significantly shorten this timeline for eligible buyers by allowing entry with a much smaller deposit.
Epik Wire tracks first home buyer conditions across every Australian capital and region. Subscribe to our newsletter for weekly property market updates.
