The house price-to-income ratio in Australia was ***** as of the first quarter of 2025. This ratio, calculated by dividing nominal house prices by nominal disposable income per head, increased from the previous quarter. The price-to-income ratio can be used to measure housing affordability in a specific area. Australia's property bubble There has been considerable debate over the past decade about whether Australia is in a property bubble or not. A property bubble refers to a sharp increase in the price of property that is disproportional to income and rental prices, followed by a decline. In Australia, rising house prices have undoubtedly been an issue for many potential homeowners, pricing them out of the market. Along with the average house price, high mortgage interest rates have exacerbated the issue. Is the homeownership dream out of reach? Housing affordability has varied across the different states and territories in Australia. In 2024, the median value of residential houses was the highest in Sydney compared to other major Australian cities, with Brisbane becoming an increasingly expensive city. Nonetheless, expected interest rate cuts in 2025, alongside the expansion of initiatives to improve Australia's dwelling stock, social housing supply, and first-time buyer accessibility to properties, may start to improve the situation. These encompass initiatives such as the Australian government's Help to Buy scheme and the Housing Australia Future Fund Facility (HAFFF) and National Housing Accord Facility (NHAF) programs.

Australia Standardised Price-Income Ratio: sa data was reported at 149.268 Ratio in Dec 2024. This records a decrease from the previous number of 152.371 Ratio for Sep 2024. Australia Standardised Price-Income Ratio: sa data is updated quarterly, averaging 82.643 Ratio from Mar 1970 (Median) to Dec 2024, with 220 observations. The data reached an all-time high of 153.422 Ratio in Jun 2024 and a record low of 62.554 Ratio in Sep 1983. Australia Standardised Price-Income Ratio: sa data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Australia – Table AU.OECD.AHPI: House Price Index: Seasonally Adjusted: OECD Member: Quarterly. Nominal house prices divided by nominal disposable income per head. Net household disposable income is used. The population data come from the OECD national accounts database. The long-term average is calculated over the whole period available when the indicator begins after 1980 or after 1980 if the indicator is longer. This value is used as a reference value. The ratio is calculated by dividing the indicator source on this long-term average, and indexed to a reference value equal to 100.

Portugal, Canada, and the United States were the countries with the highest house price to income ratio in 2024. In all three countries, the index exceeded 130 index points, while the average for all OECD countries stood at 116.2 index points. The index measures the development of housing affordability and is calculated by dividing nominal house price by nominal disposable income per head, with 2015 set as a base year when the index amounted to 100. An index value of 120, for example, would mean that house price growth has outpaced income growth by 20 percent since 2015. How have house prices worldwide changed since the COVID-19 pandemic? House prices started to rise gradually after the global financial crisis (2007–2008), but this trend accelerated with the pandemic. The countries with advanced economies, which usually have mature housing markets, experienced stronger growth than countries with emerging economies. Real house price growth (accounting for inflation) peaked in 2022 and has since lost some of the gain. Although, many countries experienced a decline in house prices, the global house price index shows that property prices in 2023 were still substantially higher than before COVID-19. Renting vs. buying In the past, house prices have grown faster than rents. However, the home affordability has been declining notably, with a direct impact on rental prices. As people struggle to buy a property of their own, they often turn to rental accommodation. This has resulted in a growing demand for rental apartments and soaring rental prices.

In 2022, Sydney was listed as the second-least affordable city worldwide in terms of housing affordability, as well as the most unaffordable capital city for houses in Australia, with a median multiple house price relative to income value of ****, meaning that housing prices in Sydney were over ** times the average annual gross median household income.

Sydney had the highest median house value compared to other capital cities in Australia as of April 2025, with a value of over **** million Australian dollars. Brisbane similarly had relatively high average residential housing values, passing Canberra and Melbourne to top the pricing markets for real estate across the country alongside Sydney. Housing affordability in Australia Throughout 2024, the average price of residential dwellings remained high across Australia, with several capital cities breaking price records. Rising house prices continue to be an issue for potential homeowners, with many low- and middle-income earners priced out of the market. In the fourth quarter of 2024, Australia’s house price-to-income ratio declined slightly to ***** index points. With the share of household income spent on mortgage repayments increasing alongside the disparity in supply and demand, inflating construction costs, and low borrowing capacity, the homeownership dream has become an unattainable prospect for the average person in Australia. Does the rental market offer better prospects? Renting for prolonged periods has become inevitable for many Australians due to the country’s largely inaccessible property ladder. However, record low vacancy rates and elevated median weekly house and unit rent prices within Australia’s rental market are making renting a less appealing prospect. In financial year 2024, households in the Greater Sydney metropolitan area reported spending around ** percent of their household income on rent.

Australia’s real house price index increased to ***** in the first quarter of 2025. House prices fluctuated over the reported period compared to the base year of 2015, experiencing a sharp increase throughout 2021, with the country’s house price index peaking in the first quarter of 2022 at *****. Prospective homeowners priced out of the market Recent house price increases reflect the ongoing challenges of housing affordability in Australia. Property prices largely outpace income growth, reigniting discussions about whether the country is stuck in a property bubble, a topic that has been debated for over a decade. The country’s house price-to-income ratio hit ***** in the second quarter of 2024, the highest ratio recorded over the past five years, making it increasingly difficult to get on the property ladder. Unaffordable rental conditions Australia’s rental market has also seen challenges, with the rent price index continuing to climb throughout 2024 into the first quarter of 2025, making the prospect of renting less appealing. As of March 2025, the average weekly house rent price in Sydney stood at *** Australian dollars, the highest across the country’s major cities. Canberra, Darwin, and Perth were the next most expensive markets for house rents, while Hobart was the most affordable capital city for both house and unit rent prices.

In the first quarter of 2025, the house price-to-rent ratio in Australia was estimated at ***, marking a decrease from the same quarter of the previous year. An indicator of how strong the property market is, the house price-to-rent ratio was calculated by dividing nominal house prices by rent price indices. Within the given period, after reaching a peak in the first quarter of 2022, the price-to-rent ratio decreased each quarter until the second quarter of 2023. From then on, the house price-to-rent ratio fluctuated, but largely trended downwards. Is Australia in a property bubble? Many industry experts believe the country is in a property bubble, indicated by the rapid increase in Australian property market prices to the point that they are no longer relative to incomes and rents, followed by a decline. The house price-to-income ratio was on an upward trend between the third quarter of 2022 and the second quarter of 2024. Nonetheless, after hitting its peak, it declined to ***** in the fourth quarter of 2024. Rental property demand In March 2025, the rental vacancy rate, which indicates how many properties are available for rent out of all the rental stock, was relatively high in Melbourne, Canberra, and Sydney. That year, the average weekly rent prices varied across the country depending on the city, with the highest average weekly rents for houses and units in Sydney. Hobart, on the other hand, had the most affordable rental properties across Australia's capital cities.

Standardised Price-Income Ratio：SA在12-01-2024达149.268Ratio，相较于09-01-2024的152.371Ratio有所下降。Standardised Price-Income Ratio：SA数据按季更新，03-01-1970至12-01-2024期间平均值为82.643Ratio，共220份观测结果。该数据的历史最高值出现于06-01-2024，达153.422Ratio，而历史最低值则出现于09-01-1983，为62.554Ratio。CEIC提供的Standardised Price-Income Ratio：SA数据处于定期更新的状态，数据来源于Organisation for Economic Co-operation and Development，数据归类于全球数据库的澳大利亚 – Table AU.OECD.AHPI: House Price Index: Seasonally Adjusted: OECD Member: Quarterly。

Housing costs for Australian homeowners without a mortgage were around three percent of household income in 2020. The house price to income ratio has continued to increase since 2020 in the country.

Housing costs for Australian homeowners with a mortgage were around 15.5 percent of household income in 2020. The house price to income ratio has been increasing in the country.

Firms in the Real Estate Investment Trusts industry manage publicly listed trusts, focusing largely on commercial property. These trusts typically trade as stapled securities listed on the ASX. Real Estate Investment Trusts (REITs) in the industry purchase and manage retail, office, industrial and other types of property. REITs generate rental income by leasing properties to businesses and investment income through developing or selling properties. Rental income generated by REITs is relatively stable, while investment income can fluctuate significantly every year. Despite volatile operating conditions in recent years, industry firms have benefited from growth in the number of businesses and low borrowing costs over the two years through 2021-22, enabling many industry REITs to expand their property portfolios. Nonetheless, aggressive cash rate hikes, particularly during 2022-23, impacted the industry's performance by increasing borrowing costs and constraining expansion efforts. Industry-wide revenue has been growing at an annualised 0.9% over the past five years and is expected to total $20.9 billion in 2024-25, when revenue will rise by an estimated 1.7%. The industry has faced volatile trading conditions in recent years, with the COVID-19 pandemic creating significant demand disruptions in key product segments, including retail and office property markets. Industry enterprises have inched downwards in recent years due to acquisition activity among some of the industry's larger firms. Nonetheless, several new REITs have been listed on the ASX over the past few years, supporting growth in industry establishments. REITs are set to benefit from rising demand for commercial property over the coming years. Economic conditions will stabilise, with demand for retail and office property poised to climb. Some industrial companies are set to reshore manufacturing activities or retain more inventory to ensure the reliability of supply chains. This trend will boost demand for industrial property. Rising demand across key property segments will enable REITs to implement rent increases, supporting revenue growth and industry profitability over the period. Overall, industry revenue is forecast to grow at an annualised 3.8% over the five years through 2029-30 to total $25.2 billion.

This statistic depicts the dwelling price to income ratio in Australia in 2016, by city. That year, the dwelling price to household ratio in Sydney was highest, with *** percent, meaning that the affordability of houses in Sydney is the most challenging in Australia.

Australia’s industrial and other property operators have faced volatile performance in recent years, with revenue growth closely linked to interest rate movements and evolving occupier trends. After a period of strong expansion on the back of low borrowing costs and soaring ecommerce demand, revenue contracted sharply in 2022-23 when the Reserve Bank raised rates, curbing both speculative developments and new leasing. More recently, stabilising interest rates and easing inflation have begun to restore investor confidence, though uncertainty remains a challenge. Overall, industry revenue has risen at an annualised 3.7% over the past five years and is expected to total $20.7 billion in 2024-25, when revenue will drop by an estimated 1.6%. Industry profitability closely mirrors interest rate cycles, with margins peaking during periods of low borrowing costs and strong leasing demand, as seen in 2021-22. However, profit growth has moderated since mid-2022 as the Reserve Bank’s tightening cycle increased financing costs and subdued new development activity, bringing returns down to pre-pandemic levels by 2024-25. While absolute demand for warehousing remains robust thanks to continued ecommerce demand, its share of overall industry revenue is now shrinking as operators prioritise higher-value segments like data centres, specialised production sites and climate-resilient agricultural facilities, which have been delivering longer leases and more stable returns. Going forwards, easing inflation and steady interest rates are reviving confidence in Australia’s industrial property sector, encouraging businesses to expand facilities and commit to new projects. Large retailers are set to increasingly build and own their own advanced distribution centres, reshaping demand towards build-to-own solutions and digital asset management. The continued growth of online shopping is fuelling the need for modern warehouses and last-mile logistics hubs, especially in major urban centres. Supported by significant government infrastructure investment and more streamlined foreign capital inflows, property operators are prioritising high-spec, technology-driven assets, with premium locations and value-added services set to drive industry growth in the coming years. This combination of factors is expected to culminate in annualised growth of 1.8% through 2029-30 to $22.5 billion.

The price to earning (PE) ratios of REITs in Australia was lower than the PE ratio of the total market and the real estate sector as of June 2025. REITs are companies that own or finance rental real estate. One of their major benefit is liquidity: Though not all REITs are publicly traded, many of the major ones are, which allows investors to easily buy and sell shares. Because REITs pay out most of their taxable income to shareholders as dividends, they typically do not pay any corporate income tax. As of June 2025, the PE ratio of REITs in Australia stood at *****, with the earnings of the market forecast to grow ** percent annually. The PE ratio is a valuation metric which is calculated as the ratio of the total market cap to the total earnings. A higher PE ratio means that the market cap has grown higher than the earnings - a sign of high investor confidence, but also that the market may be overpriced.

Banks are grappling with a transition from years of loose monetary policy to tighter financial conditions. Soaring inflation prompted an RBA pivot in the face of surging energy, housing and food prices. The RBA hiked the cash rate multiple times from May 2022 to November 2023. Prior to this, banks cashed in on high residential housing prices, with low interest rates and government schemes encouraging strong mortgage uptake over the course of the pandemic. APRA also eased the interest rate buffer in 2019, before raising it in 2021. Interest hikes have pushed up banks' incomes over the past few years. Meanwhile, banks' interest deposit expenses and funding costs have also risen while elevated interest rates have dampened industry profit margins over the past few years. Overall, industry revenue is expected to expand at an annualised 9.3% over the five years through 2024-25, to $259.2 billion. This includes an anticipated slump of 8.3% in 2024-25, as inflationary pressure shows signs of easing, the cash rate easing, weighing on interest income. As banks passed on cash rate rises through higher interest rates, the RBA's policy approach has had a cascading effect on the economy. There’s a lag before these hit customers, with some fixed-rate mortgages gradually rolling over through 2023 and 2024. Banks are securing more interest income from existing loans but must manage inflated borrowing costs and bigger payouts on deposit accounts. Residential housing prices are set to stabilise, while heavy mortgage payments will price out some potential homeowners. Banks will be monitoring consumer spending amid inflationary pressures and spiralling borrowing costs. APRA has strengthened rules for managing interest rate risks, effective from October 2025. The updated Prudential Standard APS 117 requires major financial institutions to implement robust frameworks to manage these risks effectively. The big four will need to keep up with rapid technological change, managing cyber security as consumers embrace online financial services. Competition isn't easing up as smaller technology-focused firms disrupt the finance sector and foreign banks tap into the Australian market. Revenue is projected to climb at an annualised 0.3% over the next five years, to total $262.6 billion in 2029-30.

Homeowners with a mortgage accounted for the largest share of occupancy types for households across Australia in financial year 2020, at 36.8 percent. Homeowners in Australia have had to compete with rising housing related costs, with high house price to income ratios in recent years.

While the share of Australian households occupied by homeowners without a mortgage has decreased overall since financial year 2001, the value has fluctuated in recent years to sit at 29.5 percent in financial year 2020. Homeowners in Australia have had to compete with rising housing related costs, with the high house price to income ratio in recent years.

The need for office space in Australia’s expanding cities has drawn investors to commercial property, with many wanting to cash-in on strong capital growth rates in the office segment. In the first quarter of 2021, the office yield rate in the central business district of Perth, Australia was around *** percent. This was the highest rate across all states in Australia and the second highest yield rate was in Perth, Australia.

What is office yield?

In terms of commercial property, the yield represents the expected return on investment on a property. For investors, this is an important value as it indicates future income on an investment. Yield can be based on a property’s market value, annual income, and running costs. Capital growth, however, is not included in the calculation. The office yield was the lowest in Sydney. The vacancy rate in the CBD office market was also the lowest in Sydney compared to other major Australian cities.

Growth in the office segment

In 2019, Australia showed strong growth as a destination market for cross-border commercial real estate investment inflows in Asia Pacific. In the same year, transaction volumes reached a high in the office segment, with this segment also accounting for the highest share of foreign investment in commercial property. In addition, megadeals (greater than *** million Australian dollars) reached a peak, solidifying the importance of the office segment in the commercial real estate industry in the country.