A study by the Reserve Bank of Australia found out that first-time homebuyers cannot afford most of the homes available in Sydney.

The Australian property market is increasingly difficult for young first-time homebuyers to break into, particularly in Sydney.

A study by the Reserve Bank of Australia found that the median potential first homebuyer – with an estimated purchasing power of around $474,000 – could afford just a little over 10% of the homes sold in the city in 2016.

"Over the past 20 years, the median potential first homebuyers could generally afford to buy around 10% to 30% of the homes for sale in Sydney. This has varied over housing price and interest rate cycles, but the purchasing capacity of the median potential FHB has never been close to the median-priced property in Sydney," the report said.

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On a national scale, the median potential first homebuyer could afford nearly one-third of homes sold in 2016.

In Melbourne and Perth, a little over 20% of the housing stock was accessible. Of all capital cities, the most accessible and affordable for nascent homebuyers is Hobart.

The report also pointed out that these potential homeowners could afford more homes in regional areas. In fact, the median first homebuyer could access nearly half of the housing stock sold last year.

One interesting finding points to the correlation between accessibility and interest rates.

"The share of homes affordable for first homebuyers differs by city, but the trends in accessibility have tended to follow a similar cyclical pattern. This is due to the accessibility measure being very sensitive to changes in interest rates," the study noted.

This was true in 2009, when there was a spike in the share of affordable properties due to the significant decline in interest rates.