Residential housing market in Australia - statistics & facts
Australia's residential housing market has seen many ups and downs over the past few years due to fluctuating property prices, interest rate hikes, and the country’s housing supply and demand disparity. For many people in the country, especially those wanting to live in urban centers, the home-ownership dream has become increasingly difficult. House prices remain vastly disproportional to income, reflected in the country's high house-price-to-income ratio of 121.7.
Today, housing affordability affects most Australians' access to the country's property ladder, particularly the younger generation and low-income earners. It is a prevailing issue that has been brought up in many governmental policy debates but has yet to be resolved, with the housing market geared more toward generating profits than providing affordable homes. As of September 2023, the average price of residential dwellings in Australia was around 925 Australian dollars, the second-highest average price recorded in the last ten years. House values are significantly higher in larger cities, with the median value of residential houses across Australia's capital cities ranging from over 1.4 million Australian dollars in Sydney to around half of that in Perth.
2023 marked a challenging year for Australia’s mortgage holders due to interest rate increases. The average variable mortgage interest rate for owner-occupiers in Australia sat at around 7.26 percent in January 2024 and the value of the country’s outstanding mortgage debt continued to climb. Nonetheless, many lenders expect mortgage interest rates to come down in the second half of 2024, which could stimulate buying and lending activity.
Along with growing rent prices, household expenditure on rent is high, with the share of household income spent on rent in regional areas of Queensland at an average of 30 percent. With inflation continuing to strain household finances, rental payments are becoming a heavier financial burden for many people nationwide. Rental costs and mortgage interest rate movements were among the leading financial concerns of Australian consumers as of November 2023.
Today, housing affordability affects most Australians' access to the country's property ladder, particularly the younger generation and low-income earners. It is a prevailing issue that has been brought up in many governmental policy debates but has yet to be resolved, with the housing market geared more toward generating profits than providing affordable homes. As of September 2023, the average price of residential dwellings in Australia was around 925 Australian dollars, the second-highest average price recorded in the last ten years. House values are significantly higher in larger cities, with the median value of residential houses across Australia's capital cities ranging from over 1.4 million Australian dollars in Sydney to around half of that in Perth.
Mortgage lending and interest rates
Mortgage rate hikes and a recovery in property prices affected buyer activity across Australia’s residential property market in 2023, with the number of home loan commitments to first-home buyers trending downwards. The value of household lending to first-home buyers in Australia in 2023 came to around 59 billion Australian dollars, marking a decline from 2022. The big four banks, CommBank, Westpac, NAB, and ANZ Bank, dominate Australia’s mortgage lending market in terms of gross lending value, with around a quarter of the mortgage lending value attributed to CommBank alone.2023 marked a challenging year for Australia’s mortgage holders due to interest rate increases. The average variable mortgage interest rate for owner-occupiers in Australia sat at around 7.26 percent in January 2024 and the value of the country’s outstanding mortgage debt continued to climb. Nonetheless, many lenders expect mortgage interest rates to come down in the second half of 2024, which could stimulate buying and lending activity.
Stuck renting: the reality of many Australians
Long-term renting has become a reality for much of Australia’s younger or lower-earning population, with purchasing a property remaining out of reach due to high prices, undersupply, and interest rates. With rental payments increasing over the past few years across the country’s states and territories resulting from high demand and low rental property vacancy rates, renting is becoming a less appealing prospect. As of December 2023, the average weekly rent for an apartment in Sydney was around 680 Australian dollars, the highest across the country’s capital cities.Along with growing rent prices, household expenditure on rent is high, with the share of household income spent on rent in regional areas of Queensland at an average of 30 percent. With inflation continuing to strain household finances, rental payments are becoming a heavier financial burden for many people nationwide. Rental costs and mortgage interest rate movements were among the leading financial concerns of Australian consumers as of November 2023.
