The Australian middle class is rapidly diminishing as families, workers, and retirees increasingly find themselves unable to afford the lifestyle that was once considered standard.

For 25-year-old university student and barista Saxon, the prospect of owning a home in a safe and comfortable suburb isn’t just a distant dream; it’s purely imaginary.

While previous generations planned their futures around mortgages, marriages, and children, Saxon’s aspirations are far more modest. He hopes to afford rent without stress, enjoy one holiday a year, and buy a daily coffee without second thoughts.

“Without help from my parents or government assistance, it’s impossible to make ends meet, let alone pursue further education for a better job,” Saxon shared with the Daily Mail.

“Most people I know dream of homeownership, marriage, and starting a family, but it no longer seems attainable unless you’re financially secure.”

Although Australia’s middle-class income range is approximately between $60,000 and $150,000, a median full-time salary of $78,000 is increasingly insufficient to maintain a middle-class lifestyle amidst rising costs for housing, childcare, and healthcare.

Australia is now home to 48 billionaires who hold more wealth than the bottom 40 per cent of the population combined, according to a report released by Oxfam this year. 

Oxfam Australia chief executive Jennifer Tierney said the wealth divide has widened sharply since the pandemic, with more than 3.7 million people now living in poverty.  

Saxon (pictured) says the idea of ever owning a home is ‘unrealistic’ even in Perth

The foundations of the Great Australian Dream are cracking, with the soaring cost of simply keeping a roof over your head delivering the biggest blow (pictured, Sydney in 1995)

‘While millions of Australians are cutting back on essentials, struggling with soaring rents and mortgages, and watching global crises… Australia’s billionaires are accumulating extraordinary wealth at extraordinary speed,’ she said.

‘The gap between those doing it toughest and those benefiting most is stark and well evidenced.’ 

Demographer Simon Kuestenmacher warned the nation is sliding into a ‘U‑shaped society’, split between asset‑rich owners and a swelling cohort permanently locked out of homeownership.

He said the middle class has shrunk dramatically, with only 58 per cent of Australians now in the ‘middle-income’ group, below the OECD average and well down from previous decades.

‘Middle-class jobs have largely vanished, leaving more people at the bottom end and more at the top,’ he said.

By the 1980s, most Australians saw themselves as solidly ‘middle class’ – a modest home complete with a Hills Hoist and a yearly holiday. 

Now those foundations are cracking, with the soaring cost of simply keeping a roof over your head delivering the biggest blow to the middle-class dream. 

The Great Australian Dream is fading as house prices – more than triple what they were in the 2000s – race ahead of wages, forcing buyers into record debt or out of the market entirely. 

By the 80s most Australians saw themselves as solidly ‘middle class’ with a modest home, a Hills Hoist and a yearly holiday (pictured, an ad in the Australian Women’s Weekly)

A home in Sydney in the 1970s is pictured

A typical couple buying their first home can no longer afford an entry‑level house in any Australian city, Domain data shows. 

Five years ago, only Sydney was out of reach. Today, the Harbour City’s entry-level median is $1.15million, up 64 per cent since 2020. 

Brisbane has doubled to $860,000, Perth to $780,000, and Adelaide has more than tripled to $720,000.

For a Sydney couple aged 25–34 on the median income, servicing even the cheapest house now swallows 62 per cent of their pay – double the amount five years ago.

Domain’s chief of research and economics, Dr Nicola Powell, said buyers are taking on greater financial risk than at any time in the past decade.

‘This is no longer just a Sydney problem. Brisbane, Adelaide and Perth, once seen as more attainable, have seen rapid growth in entry-level prices, pushing them much closer to the least affordable markets,’ she said.

‘Units have traditionally been the stepping stone into homeownership, but even that pathway is narrowing. In several capitals, unit buyers are now stretching themselves into mortgage stress.’

Gina Rinehart, Australia’s richest woman, has an estimated net worth of over $30billion

We’ve become a nation of renters

Census data shows the national home ownership rate peaked at 71 per cent in 1966, and then dropped from 70 per cent in 2006 to 66 per cent in 2025.

The decline is sharpest in younger Australians with ownership for those aged 25–34, plunging from 61 per cent to 43 per cent. 

The rate for people aged 55–64 has seen only a modest fall, from 81 per cent to 76 per cent – though more Australians in this age bracket are carrying mortgages for longer.

Renting, once a temporary stopover in your 20s, is now a long-term reality across more stages of life. Since 1981, the share of Australians renting has climbed from 27 per cent to 31 per cent. 

Meanwhile, the financial squeeze is intensifying. Rising interest rates, soaring grocery bills and relentless rent hikes are wiping out any chance to save. 

Cotality data shows rents rose three times faster than wages over the past five years – up 44 per cent compared with wages at 17 per cent.

Affordability has also hit a new low: renters now spend a third of their pre‑tax income on housing, driven by tight vacancies, limited supply and demand that keeps outstripping what’s available. 

Dozens of prospective buyers wait in line to inspect a house for sale in the suburb of Eastwood in Sydney 

It comes as alarming national heatmaps reveal essential workers in schools, hospitals and healthcare can’t afford to pay rent in large parts of the country.

Anglicare Australia research found having a secure job in a critical sector is no longer enough to guarantee you can afford a roof over your head.  

Across Australia, only 1,117 rentals (2.3 per cent) were affordable for an ambulance officer, 850 (1.7 per cent) for an aged care worker, 754 (1.5 per cent) for a nurse, and just 417 (0.8 per cent) for both an early childhood educator and a hospitality worker.

Economist Leith van Onselen said Canada provides a template for ending Australia’s housing crisis, which he blamed on the country’s largest immigration surge in history. 

‘Canada is actively solving its rental crisis by curbing immigration. Why won’t the Albanese government do the same for Australia?’ he asked. 

He said the sharp deceleration of Canada’s population growth has been most noticeable in the country’s rental sector, with Canadian asking rents falling for 16 straight months to hit a 31-month low.

‘In 2024, Canada’s centre-left Liberal government imposed major immigration curbs intended to alleviate housing and infrastructure strains,’ he said.