Why Canberra is a national bright spot for first-home buyers in 2026

As first-home buyers face their toughest struggle in history to break into the Australian housing market, just two capital cities are offering a bright spot – and Canberra is one of them.

Nationally, entry-level house prices skyrocketed a staggering 68 per cent over the past five years, despite wages rising by less than a third of that, while entry-level unit prices rose by 30 per cent. Yet Canberra was the only capital to see entry-level unit prices fall over the past year, dropping $15,000 to $420,472, according to the latest Domain First Home Buyer Report 2026.

The ACT also recorded the smallest uptick of entry-level house prices – with values rising $30,000 (4 per cent) to $780,000 – which is a far cry from the double-digit growth of Sydney, Brisbane, Adelaide, Perth and Darwin.

Coupled with the capital’s comparatively high incomes, that has handed Canberra’s first-home buyers an unexpected advantage: one of the shortest times in the country to save a 20 per cent deposit.

The report models a couple aged 25-34, and compares average salaries in each capital with entry-level house and unit prices.

In Canberra, it now takes five years and one month to save for an entry-level house, which is shorter than in every capital city except Hobart and Darwin. For units, the timeline drops to just two years and 10 months, beaten only by Darwin.

The only other major capital to offer a similar reprieve was Melbourne, where house price growth lagged behind most of the other capital cities at just 6.7 per cent annually, and behind only Canberra for units, at 1.3 per cent.

While the two cities offer a slight edge for first-home buyers, the Domain report largely revealed the record lengths of time now required to save a deposit and the excruciating later challenge of mortgage serviceability.

Sydney remains the nation’s toughest housing market, with savings times for entry-priced houses blowing out to seven years and seven months. In Brisbane – the nation’s worst capital for unit buyers – it now takes four years and 11 months, more than double the time it takes in Canberra.

Still, the broader national picture is bleak.

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“In some places, we’ve seen entry-level prices rising over 20 per cent in the last 12 months, which is an extreme rate of price growth,” says Domain chief of research and economics Dr Nicola Powell.

“At those rates, no one stands a chance of keeping up. While the market is fragmented across Australia and there are still pockets of affordability, they are shrinking.

“I would say this is the worst we’ve ever seen it for first-home buyers. It’s now more challenging to get into the market than it’s ever been.”

The report also found mortgage stress remains widespread despite rate cuts in 2025. All capital cities remain above the 30 per cent mortgage stress threshold for entry-priced houses, with Sydney and Canberra among the most stretched.

In Sydney, mortgage repayments on an entry-priced house for a couple aged between 25 and 34 now consume 61.8 per cent of their income.

In Brisbane – the second-worst capital for mortgage serviceability – the figure is 50 per cent. Darwin delivered the lowest mortgage burden to buyers at 31.2 per cent for houses, with Canberra sitting at 40.2 per cent.

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For units, Canberra offers the lowest mortgage repayment percentage at 21.7 per cent, after Darwin.

Agent Luke Lindley of AM Property Agency says while Canberra’s unit market has softened, competition in the sub-$1 million house segment has intensified, particularly among first-home buyers backed by government schemes.

“What I’m seeing is three-bedroom separate-title homes are transacting faster than they have in a couple of years,” he says. “Districts like Tuggeranong Valley and Gungahlin are particularly popular, and that’s because they offer older homes at great price points.

“I recently sold a four-bedroom, one-bathroom house on a 910-square-metre block at 9 Keeling Place in Kambah to two lovely first-home buyers who were brothers. The home went for $900,000 under the hammer, which was a strong market result.”

Lindley says he sold another three-bedroom, one-bathroom house on an 800-square-metre block in a southern suburb to a first-home buyer for $880,000.

“Houses are selling on auction day for good prices now, but six months ago a house like that might have sold post-auction after negotiations, while struggling to reach the reserve,” he says.

Despite the recent uptick, Lindley says first-home-buyer sentiment across the city remains strong, buoyed by relatively high public-sector wages and federal support.

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“I have a three-bedroom house in Palmerston that will go under the hammer soon, at a great entry price point. We’ve had 40 groups through that one,” he says.

“They’re mostly first-home buyers, and they’re making up the lion’s share of buyers in that sub-$1 million sector.”

While Lindley believes price growth will remain modest for houses, he doesn’t expect units to see a rebound any time soon.

“About six months ago, the average days on market for apartments was 93, and it’s now bumped up to 107,” he says. “There’s more stock in this sector, and that means buyers have plenty of options.

“There’s also a lot of new development happening. That said, while it might be a bit softer compared to the days of COVID, the pricing we saw during that period was a bubble. When you compare [today] to the pre-pandemic market, we haven’t gone back.

“Now that interest rates are normal, price growth has mellowed.”

The report also identified the most accessible first-home-buyer pockets in each capital.

In Sydney, Wollondilly offers the shortest time to save for a 20 per cent deposit on an entry-level house at six years and one month. In Melbourne, Melton-Bacchus Marsh is the most accessible at four years and five months. In Canberra, it’s Molonglo at four years and five months.

For units, Sydney’s Mount Druitt leads the pack at three years and four months while Melbourne’s Essendon and Canberra’s Woden Valley offer some of the best conditions in the country – taking first-home-buyer hopefuls just two years and nine months and two years and six months respectively.

Nationally, the report makes one thing clear: while markets such as Canberra and Melbourne are offering relative breathing space, Australia’s first-home buyers are still facing one of the steepest climbs onto the property ladder in modern history.