The 'New Normal' is an Australian Nightmare for First Homebuyers

There was once a time in Australia when owning a home was considered a rite of passage—a dream that seemed difficult but achievable. But today, that dream is becoming a mirage for first homebuyers. In Perth, a modest three-bedroom house on a tiny 187-square-metre block is expected to sell for close to $700,000. Three years ago, it would’ve gone for around $450,000. And we’re supposed to accept this 55% surge as the “new normal”?

This is not normal—it’s outrageous. It’s yet another chapter in a national housing saga that has left an entire generation locked out, frustrated, and increasingly desperate.

Take Piara Waters, a suburb just southeast of Perth. It’s a relatively new development, characterised by cramped houses built mere centimetres apart with little greenery to speak of. Yet even here, competition is so fierce that buyers are being urged to “put their best offer forward” without any guarantee of a second chance. The message to hopeful homeowners is clear: compromise on space, location, and quality—or miss out entirely.

Real estate agent Aman Singh describes today’s market as dictated by demand and supply. He’s not wrong, but what’s alarming is the extent to which scarcity is being normalised. A home once deemed basic now commands a luxury price tag. Median house prices across Perth hit $855,395 in June 2025—a 7.8% rise from the year before—with predictions of another 10% growth by year’s end. This trajectory doesn’t just defy logic—it mocks it.

And let’s not forget the broader picture. Nationally, the average price of a residential dwelling surpassed $1 million in early 2025, setting a grim new benchmark. For young Australians, it’s not just discouraging—it’s infuriating. The so-called “Great Australian Dream” is no longer a dream at all. It’s a privilege afforded only to those who’ve already won the property lottery.

First homebuyers, many of whom are young families or professionals trying to establish roots, now face an impossible dilemma: pay inflated prices or remain stuck in the rent trap. As Mr Singh points out, renting effectively means paying off someone else’s mortgage. But for many, that’s the only viable option, especially when homes are being sold for tens of thousands above the asking price due to bidding wars.

More tragically, the emotional toll is mounting. Singh estimates that up to 75% of prospective buyers in the area are first-timers, many of whom are growing “disgruntled” after being consistently outbid. By the sixth missed opportunity, they’re understandably fatigued—financially and mentally. Yet the advice remains the same: buy now or risk never getting in.

But how fair is that? How sustainable is a market that excludes the very people it once sought to empower? It’s time we stopped romanticising resilience and started demanding reform.

Government efforts to “assist” first homebuyers—via grants and stamp duty concessions—are token gestures in a marketplace where the fundamentals are broken. If supply is the issue, then we need serious zoning reform, faster planning approvals, and incentives for developers to build genuinely affordable homes, not more investor-grade apartments or tightly packed estates that barely meet liveability standards.

Moreover, we must reconsider the growing dominance of investors in suburban markets, many of whom are contributing to price surges by outbidding owner-occupiers. A rebalancing is necessary, or we risk turning our cities into playgrounds for capital, not communities for families.

What’s playing out in Piara Waters isn’t just a Perth problem—it’s a national one. It speaks to a systemic failure that’s leaving thousands behind. If we continue to treat skyrocketing property prices as an inevitability, rather than a policy failure, we will erode not just the hopes of young Australians, but the foundation of our national identity.

The “new normal” should never be homes out of reach, tiny blocks with eye-watering price tags, and first-time buyers forced into emotionally and financially exhausting bidding wars. We need a new vision—one that brings fairness, access, and common sense back into the housing conversation.

Because if the current situation is normal, we should all be deeply concerned.