James Martin and Liz Upcroft are doing everything right, slashing their weekly costs by $600 and moving in with family to turbocharge their savings.
But in the nation’s runaway property market, even sacrifices don’t leave you feel like you’re getting ahead.
The couple, both 28, are aiming to buy a home by the year’s end, but their progress is being outpaced by Sydney‘s soaring property prices, a trend that accelerated after Labor expanded its first-home buyer scheme in late 2025.
After being priced out of their dream suburbs of Surry Hills and Darlinghurst in Sydney’s inner east, the pair are now looking at Parramatta in the city’s west.
But with Domain predicting house prices will soar in the first half of 2026 by 10 per cent, they could be priced out of that western suburb as well.
‘It feels a little bit like a treadmill. 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,’ Martin told the AFR.
Their predicament underscores a broader crisis: Australia is falling behind on its promise to fix housing supply.
Under the Federal Government’s ambitious Housing Accord, 1.2million new homes were meant to be built by 2029.
James Martin and Liz Upcroft (pictured) are doing everything right, slashing their weekly costs by $600 and moving in with family to turbocharge their savings but prices keep rising
Promising data released by the ABS shows the total number of dwellings approved rose 15 per cent in November after a significant fall the previous month
But the nation is forecast to miss that target by a staggering 426,000 homes, Propertybuyer’s Australian Property Market Outlook 2026-2030 has revealed.
The looming gap is expected to intensify pressure on prices, rents, and housing affordability, deepening Australia’s housing crisis.
Propertybuyer chief executive Rich Harvey warned the deficit is structural, not cyclical, meaning the next five years will be defined by chronic undersupply rather than speculative demand.
‘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.
‘Even if building activity accelerates, the gap will not close quickly. This has far-reaching implications for affordability, rents and investment.’
The damning research reveals most jurisdictions are behind, with New South Wales accounting for almost half of the shortfall.
Victoria is progressing but is still projected to fall short, while Queensland faces acute supply stress driven by migration inflows and family demand.
Prime Minister Anthony Albanese (pictured) will need to do more than scratch his head to fix an estimated shortfall of 426,000 dwellings under his Housing Accord
A queue of people wait to inspect a rental for lease in Sydney
The ACT is the only jurisdiction on track to meet its housing target, while the Northern Territory and Tasmania face the largest proportional gaps.
At a local level, more than 85 per cent of regions nationally are behind schedule. Many communities are building at fewer than 70 per cent of the expected rate.
Despite cost-of-living pressures and interest rate volatility, undersupply is forecast to fuel price growth across all capital cities through 2030, with home values tipped to rise up to 30 per cent.
Sydney houses could hit $2.22million, Melbourne $1.4million, and Brisbane $1.45million by 2030.
Brisbane couple Raphael and Kate Tripet left Sydney two years ago, driven out by the soaring cost of living.
Raphael, a software engineer, and Kate, a finance manager, said owning a freestanding home in Sydney that could accommodate their family-of-four was simply out of reach.
‘We couldn’t afford the Sydney market unless we were willing to move far away or make major compromises on what we wanted,’ Raphael told Daily Mail.
‘That’s what pushed us to look elsewhere in Australia. As immigrants, we weren’t tied to Sydney, so relocating was an option.’
Brisbane couple Raphael and Kate Tripet (pictured) left Sydney two years ago, driven out by the soaring cost of living
Raphael had some tough advice for other young people wanting to buy a home: avoid buying new and cut back on expenses.
‘Our generation has embraced dining out, food delivery, takeaway meals and daily coffees,’ he said.
‘They’re convenient and great for socialising, but the costs add up quickly.’
AMP chief economist Shane Oliver said housing affordability had deteriorated further from already very poor levels.
‘This is evident in the ratio of home prices to wages and incomes being at record levels,’ he said.
‘This could limit the upside in property prices – although we and many others have been saying that for years.’
Renters will bear the brunt as conditions tighten further, with new migrants and students renting first before transitioning to ownership.
Vacancy rates in Perth, Brisbane and Adelaide remain critically low, with some markets seeing weekly rent hikes of $50 to $80 over the past year.
A deep dive into Australia’s housing outlook shows the biggest constraints are skills shortages in key trades, planning delays, NIMBY opposition, and construction costs still 40 per cent above pre-2020 levels.
Harvey stressed policy announcements alone won’t solve the crisis.
‘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.
The biggest constraints to building more homes are skills shortages in key trades, planning delays, NIMBY opposition, and construction costs still 40 per cent above pre-2020 levels
‘Unless policymakers address these bottlenecks, the market will rely on price and rent signals to ration demand, which will hurt younger Australians the most.
‘With FOMO running hot in the boom time cities of Brisbane, Perth and Adelaide they are likely to remain the strongest of the state capitals over the next six months.’
However, Harvey warned that as their relative affordability deteriorates, those capitals risk a slowdown in the second half of the year.
He said even with population growth projected to slow modestly, migration inflows, lifestyle shifts and household formation continue to expand demand.
Australia’s housing pipeline roared back to life in November, with total dwelling approvals jumping 15.2 per cent to 18,406, according to the latest ABS figures.
The surge was powered by a 34 per cent spike in apartment approvals, reversing October’s slump and marking the strongest month since June 2018.
But despite the monthly surge, the longer-term picture remains bleak.
Master Builders chief economist Shane Garrett warned 195,000 homes were approved over the year to November, well short of the 255,000 annual target needed to meet the National Housing Accord.
‘During the Accord’s first year, Australia fell 60,000 homes behind schedule,’ Garrett said.
‘Higher-density building, up 36.3 per cent in November, offers our best shot at closing the gap. When conditions are right, apartment output can ramp up fast.’
