Australian house prices are considerably higher than in many other comparable countries, largely due to factors such as supply and demand imbalance, tax policies, and low-interest rates.
House prices in Australia are extremely high compared to income, relative to other countries. The market is propped up by rules that provide tax deductions for property investment, and by repeated state government bonuses for first home buyers. Furthermore, the supply of new homes is hard to generate.
The number of residential dwellings in Australia rose by 45,500 to 10,911,000, and the mean price of residential dwellings fell $28,700 to $881,200, this quarter. The mean price of residential dwellings in NSW ($1,130,500) remains the highest in the country, followed by the ACT ($929,200) and Victoria ($894,400).
Why are Australian houses so expensive? Australian house prices have been steadily rising year on year as a growing population lifts demand for housing while supply has not kept up with the requirement. A decline in interest rates over the last two decades has also boosted the number of buyers in the market.
Australia's two largest and most expensive housing markets—Sydney and Melbourne—remain out of reach for most home buyers, especially first-time home buyers. A 2022 report found that with median home values in each city topping $1 million, Sydney and Melbourne qualified as some of the least affordable cities worldwide.
You can still buy a reasonable property for $200,000 in an outer city suburb. “But you will be speculating as to whether it will go up or not (in value). They often do have a higher rental yield, which helps those new to property investing or those with less spare cash-flow.
"Property price falls are likely to continue and accelerate in 2023," report author Cameron Kusher said, blaming the cooling market on the rising cost of borrowing and its associated drain on household budgets. Australia's most expensive cities will likely see the largest price falls, he said.
“Prices now expected to lift 5 per cent in 2024, revised up from 2 per cent.” Overall, Westpac has predicted house prices will soar by 5 per cent in both Sydney and Melbourne, prices will jump by 6 per cent in Brisbane and rise by 8 per cent in Perth in 2024.
Australia's current housing crisis is driven by the nation's unique demographics and a shortage of available residential land near jobs and services, with the impact of interest rates and government homebuyer subsidies often overstated.
There is no “one size fits all” plan for all but it is understood that an individual may need approximately $20,000 each year and an average family needs more than $50,000 a year to get by in Australia.
The mean age of people buying their first home in Australia has edged up from 33 for either a new or established dwelling in 1995–96 to 35 for a new dwelling and 36 for an established dwelling in 2017–18. Figure 1: Age bracket of first home buyers (by percentage) in 1995-96 and 2017-18.
Investing in property can be a good way to build wealth – but there are several factors you need to consider. The potential tax benefits and wealth generation make real estate an attractive investment option for many Australians, but it is not without any drawbacks.
Sydney, NSW. Median multipe of 13.3. Prices have risen at six times the rate of inflation since 2020.
Australia's most expensive suburbs will shock you with how much they cost. Image: Canva. Australia's most expensive suburbs by median house price are all concentrated in Sydney, the most expensive city in Australia, and one of the most expensive in the world.
Research from the Swinburne University of Technology suggests that the cheapest time to buy a house in Australia is during, just before or just after winter. In Sydney, Adelaide and Darwin the least expensive month to buy was June or July, suggesting that if you buy during winter you may find yourself a bargain.
The average annual growth rate for well-located capital city properties is about 7%, which means that Australia's median dwelling price should be around $1.1 million in 2030. But some properties will outperform others by 50-100% in terms of capital growth, so take these house price predictions with a big pinch of salt.
Nationwide prices are expected to rise by approximately 2 per cent by the end of 2023. However, as the RBA potentially cuts interest rates before the end of 2023, demand pressures will contribute to a favourable environment for property prices.
Australian property values experienced a downturn in 2022 and prices continue to fall—but predictions of the overall peak-to-trough price decline tend to vary between 15-25%. Read more about whether the Australian property market is going to crash.
According to a report by Zillow, home values are projected to increase by 5.5% over the next year, slower than the 16.9% increase seen in 2021. Zillow predicts that home values will increase by 3.5% in 2023, 3.4% in 2024, 3.3% in 2025, and 3.2% in 2026.
Westpac has revised its house price forecasts, with dwelling values expected to stabilise in 2023 (initially forecast a -7% decline). National dwelling values are predicted to rise 5% in 2024, up from 2%.
Cost of living in United States is 15% more expensive than in Australia.
1. Canberra – Australia's Capital City. Nestled between Sydney and Melbourne, Canberra is not only the capital but also Australia's safest city. With a low crime rate and a small-town vibe, Canberra offers an attractive blend of city living and peaceful suburban life.
But how expensive is it? Australia currently has the 12th highest cost of living in the world, with the USA and UK well behind at 21 and 23rd place respectively. The overall cost of living in Australia is 9% higher than the USA, but 10% cheaper than London.