Australia housing market: Residents cut spending to afford homes

New data indicates a record number of Australians are willing to reduce their discretionary spending to afford home ownership. A survey by Cotality revealed that over 75% of residents are prepared to cut back on expenses, a figure higher than comparable cohorts in Canada, the United States, and the United Kingdom, where figures remained below 70%.

Gen Z Australians show the highest willingness to sacrifice lifestyle for property. This trend is reflected in declining discretionary spending on dining out and vehicle ownership, as well as an increase in young adults living with parents. Data from the Household, Income and Labour Dynamics in Australia Survey shows that the proportion of 26-to-29-year-olds living at home rose from 19.6% in 2012 to 21.9% in 2024.

Millennials are also making financial adjustments, such as selling second vehicles or postponing holidays, to secure larger family homes. Market analysts suggest that many prospective buyers are waiting for average mortgage interest rates to drop to approximately 4.9%, whereas the average rate for owner-occupiers was recorded at 6.3% in August 2026.