The two major cities where potential home buyers need to earn $17,000 more than in January to break into the market

The Reserve Bank of Australia’s three interest rate increases since January 2026 have sharply reduced borrowing capacity for homebuyers, pushing the minimum income needed to purchase a median home in Brisbane and Perth up by $17,000 and $16,500. The cash rate now stands at 4.35%, reversing all cuts made in 2025, and has compounded the strain on buyers, particularly in high-growth cities. Cotality’s research reveals that property prices in Perth and Brisbane have risen 25.8% and 19.1% respectively over the past year, driven by population growth and investor demand. Brisbane’s apartment market has surged, narrowing the price gap with Sydney, making entry-level units the most expensive in the country. The minimum income required to buy a unit in Brisbane now exceeds that of Sydney by just over $2,000. Gerard Burg, head of research at Cotality, noted that rising rates and property values have created an ‘aggressive income barrier’ for buyers, even at lower price points. The shift toward apartments reflects heightened competition for affordable housing, as investors redirect focus away from Sydney. Australia’s auction clearance rates have fallen to 54% nationwide, with Sydney at 52.8% and Melbourne at 57.6%, indicating cooling demand. Preliminary results show some markets hitting pandemic-era lows, with Sydney’s clearance rate finalizing at 48.9% last week. The data underscores the financial strain on prospective buyers amid escalating costs.